David Luski’s DRA Advisors injected $53 million into the Chicago-area’s multifamily market in a a purchase from a Blackstone affiliate, closing out a year in which investors were buoyed by strong rent growth.
Real estate giant Blackstone cashed in on a 236-unit apartment complex in suburban Buffalo Grove after acquiring the Philadelphia-based real estate investment trust that bought the property in 2016. Blackstone sold the property, Windbrooke Crossing at 1160 Windbrooke Drive, this month for $5 million more than what it last traded for six years ago, Lake County property records show.
New York-based DRA paid $53 million for Windbrooke on the heels of its former landlord, Philadelphia-based Resource REIT, getting bought for $3.7 billion in a deal that included its debt by Blackstone in May, public records show. Resource bought the apartment complex for $48 million in 2016, according to published reports. DRA and Blackstone didn’t return requests for comment.
The deal for the asset built in 1986 amounts to a slimmer margin from its previous sale than the jumps in value represented by recent deals for similar multifamily assets in Chicago’s north and northwest suburbs. Bayshore, for instance, bought a 344-unit Mount Prospect property first built in 1973 for $50 million this summer, up 50 percent from the $33 million it last sold for in 2014, though almost half of that complex’s units were renovated with new cabinets, appliances and countertops by the previous owner. It’s unclear whether the Buffalo Grove property has gone through any recent upgrades.
The trade also marks a fortification of DRA’s Chicago-area multifamily holdings, which already included more than 2,900 housing units across several other large properties in suburbs such as Wheeling, Lisle, Bensenville and Naperville.
DRA purchased the property as multifamily availability is near a record low in suburban Chicago, falling to around 3 percent in June, according to a third-quarter report from Marcus & Millichap that pointed to the pandemic-induced flight to the suburbs that has continued among aging millennials. Rent growth throughout Chicagoland has remained strong, according to the report, which forecasts a year-over-year increase of almost 10 percent.
The trade comes as Blackstone Real Estate Income Trust is tightening redemption requests after a breach of its quarterly repurchase limit. Rising interest rates have hindered the fund’s ability to make acquisitions.
DRA also has a large portfolio of retail assets in the Chicago area, totaling 5.6 million square feet across 45 properties, according to its website. Its other acquisitions this year include a $164 million landmark Miami office skyscraper it bought in joint venture with CP Group, and a 33-asset portfolio of grocery-anchored shopping centers in eight northeastern states that DRA bought in a joint venture with KPR Centers from Cedar Realty Trust for $840 million.
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