A Canadian investment firm with multiple properties in downtown Chicago added a tower in the Fulton River District.
An affiliate of Ontario’s Morguard paid $133 million for Echelon Chicago, a 39-story high-rise at 353 North Desplaines Street, Crain’s reported. The seller was Miami-based Crescent Heights, which paid $104.3 million for the 350-unit property in 2012.
The purchase was the fourth multifamily acquisition in downtown Chicago for Morguard, which has been able to increase rents in its area properties by 12 to 18 percent. The firm’s John Talano told the outlet that he believes Chicago is “coming back strong.”
Morguard entered the Chicago market in 2012 with the purchase of the two-tower, 848-unit Alta at K Station complex, next door to Echelon. It also owns the 690-unit Marquee at Block 37 high-rise and the 515-unit Coast apartment building in the Lakeshore East development.
Alta at K Station and Echelon will have “management synergies” and the firm is “absolutely considering” more purchases downtown, Talano told the publication.
Echelon opened in 2008 and has monthly rents ranging from $2,082 for a studio to $3,615 for a two-bedroom. At last count, the building was more than 95 percent occupied.
Some multifamily investors have been hesitant to buy properties in Chicago because of an increase in assessments from Cook County Assessor Fritz Kaegi. Landlords are bracing for a big jump in their property taxes this year.
Talano said that Chicago has more opportunities than risks, acknowledging the city has lost some of its appeal with multifamily investors. Higher assessments “scared a lot of people off,” he told the outlet. “But the pendulum has swung too far.”
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— Victoria Pruitt