Connor Group’s 568-unit suburban Chicago multifamily hits the market

Stonebridge of Arlington Heights, a 586-unit luxury apartment complex in the northwest Chicago suburb, has hit the market, the latest in a series of big suburban multifamily properties to test buyer appetites.

The listing from CBRE doesn’t include a sale price. The property traded hands in 2016 for $105 million, according to previous reporting in The Real Deal. The owner is Ohio’s Connor Group.

This year has seen a surge in large suburban complexes like Stonebridge trading hands at high prices. Pennsylvania’s Morgan Properties recently paid about $181 million for more than 1,000 apartments across multiple properties in the suburbs. That deal surpassed a previous record price set by Oak Brook-based Albion Residential’s purchase of a 612-unit multifamily asset in Palatine for $140 million. Now, a slowdown in multifamily development caused by rising interest rates could be working in favor of sellers, even as it makes debt more expensive for buyers.

With supply shortened by a lack of development due to surging costs of both interest and construction, rents have risen in the Chicago area this year by more than 9 percent, and landlords are cashing in.

CBRE’s listing for the Stonebridge apartment complex pitches it as a “full package stable workforce housing asset.” CBRE executive vice president Steve LaMotte, who is handling the listing, didn’t return a request for comment from The Real Deal.

The debt-free property’s occupancy is consistently high, according to the listing, and is currently at more than 95 percent. The units average 1,075 square feet, with the rents starting at $1,399 for a one-bedroom apartment and going up to $2,599 for a two-bedroom, according to Connor Group’s website.

Built in the 1970s, the complex has seen varying levels of renovation over the last few years, which the CBRE listing touts as an opportunity to add value.

“The possibilities are virtually limitless in this rare large asset acquisition in Arlington Heights, a highly-desirable suburb of Chicago,” the listing reads.

The listing also notes Arlington Heights’ proximity to 40 million square feet of office space in the northwest Cook County and O’Hare office markets.

Affluent Arlington Heights-Palatine was one of Chicago’s best-performing suburbs in terms of drops in vacancy rates and rises in rent in 2021, according to Marcus & Millichap’s latest Chicago Multifamily Market Report. Some brokers said the pandemic has made the suburbs more attractive places to live as remote work models crimp the need for downtown offices and workers seek more room in suburban settings.