The River North apartment tower has sold $89 million, marking a loss for its seller.
San Francisco-based FPA Multifamily bought the 304-unit West77 property at 77 West Huron Street from L&B Advisors, Crain’s reported. Its owner L&B spent $90 million on the 25-story building in 2011.
Newmark was the brokerage that arranged the sale.
The building is one of only a handful of Chicago high-rises that changed hands so far this year, reflecting a shaky apartment investment market. Amid fears of rising property assessments, multifamily investors have been hesitant to buy downtown.
Last year, Cook County Assessor Fritz Kaegi increased the total assessed value of all nonresidential properties by 77 percent. Multifamily apartment buildings were included in that legislation.
Despite those concerns, high demand has led the downtown apartment market to boom times recently, with rents rising to record highs in the second quarter.
In addition, current property owners don’t yet know how much they will pay in taxes, as this year’s tax bills have been delayed by several months. Therefore, many investors are hanging back before making any big bets.
The Board of Review could help FPA avoid a big tax hike. Last year Kaegi valued West77 at $89.2 million, which was 42 percent higher than the 2020 value. The Board ultimately cut the property’s value down to only an 11 percent increase from the 2020 value.
FPA, which paid $175 million for the two-tower, 1,061-unit McClurg Court complex in Streeterville last year, bought West77 at a time when it’s 96 percent occupied. The average apartment in West77 rents for $2,646 per month.
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