A decade after first marketing a 504-unit suburban Chicago apartment complex, Tony Malkin has found a taker.
An LLC registered to David M. Friedman, head of Skokie-based real estate investor F&F Realty, bought the Glen Oaks Commons at 9700 Sumac Road in the northwest suburb of Des Plaines for $74 million, public records show. Malkin, chairman, president and CEO of Empire State Realty Trust, sold Glen Oaks through his Malkin Properties. The buyer didn’t respond to a request for comment.
“Every investment has a life cycle,” said Thomas Panagos of Malkin Properties.
It’s the latest big suburban apartment complex to trade hands. Albion Residential set a record with its $140 million purchase of the 612-unit Bourbon Square property, only for that price to be surpassed weeks later by Morgan Properties, which dropped $181 million to pick up three properties containing more than 1,000 units in Elgin, Schaumburg and Palatine as part of a $410 million splurge on Illinois and Indianapolis apartments.
A Malkin venture that was a predecessor to Empire State has owned Glen Oaks Commons since 1989. The deal adds another longtime owner to the list of those who have sold multifamily in the Chicago area this summer as investors cash out after double-digit rent increases over more than a year. The Wirtz family, which owns the Chicago Blackhawks, recently sold its Evanston portfolio of vintage suburban apartments for $35 million, the first sale it’s made in recent memory.
Malkin marketed Glen Oaks Commons for sale in 2012, then elected to refinance instead in December of that year, obtaining a $40.5 million loan against the property, public records show. Friedman’s venture borrowed more than $52 million from PNC Bank to complete the acquisition, suggesting that investors are willing to pay for the increased costs of debt against Chicago-area apartments as the single-family market cools and listings plummet.
Glen Oaks Commons was marketed as a value-add play, meaning Friedman’s venture could boost its rental income by investing in renovations and upgrades of a property built in 1971.
Friedman’s firm earlier this year obtained a $177 million refinancing against a Chicago apartment tower it developed in a venture with Fifield at 727 West Madison, one of the city’s most recognizable buildings due to its elliptical shape and visibility from Interstate 90. The company is also a landlord of at least seven other suburban Chicago apartment complexes in Lombard, Wheeling and Glen View, among other villages, according to its website.
John Jaeger of CBRE represented Empire State in negotiating the deal.
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CORRECTION, 8/18/22, 1:15pm: This story has been corrected to show that Malkin sold Glen Oaks through Malkin Properties.
UPDATE, 8/18/22, 1:15pm: This story has been updated to add comment from Malkin Properties.
UPDATE, 8/18/22, 3:05pm: This story has been updated to add additional titles in second paragraph.