Eagle Infinite drops $29M on South Side apartments

Jaime Nahon isn’t done investing in Chicago’s South Side. His real estate firm has doubled the size of its portfolio after closing a deal with a Los Angeles-based seller.

ShainRealty Capital, led by Jonathan and Elliot Shainberg, sold a 200-unit portfolio across eight buildings in the Bronzeville, Hyde Park and Kenwood neighborhoods to Nahon’s Eagle Infinite Investments for $29 million, people familiar with the deal said.

It’s at least the second group of apartment buildings in the South Side neighborhoods that have sold for more than $25 million in recent months on deals brokered by Interra Realty’s Lucas Fryman and Ted Stratman.

The deal illustrates that sellers who can offer assumable debt on buildings with lower mortgage rates have a clear advantage in an otherwise strained investment market.

“There were some loan assumptions involved with the majority of the properties. which made them more attractive because the loans that were assumed have lower in place interest rates than what’s available in today’s market,” Fryman said.

The buildings involved in the deal include 4208, 4213 and 4220 South Michigan Avenue; 4611 and 5001 South Drexel Boulevard; 4716 South Martin Luther King Jr. Drive; 5219 South Calumet Avenue; and 4119 South Ellis Avenue.

For ShainRealty, the deal marks an exit from Chicago with what appears to be a profit over its costs to acquire the portfolio. It assembled the buildings between 2019 and 2021 for about $22.6 million.

“ShainRealty is targeting investments into more business friendly states,” said Jonathan Shainberg, who declined to elaborate further.

Eagle Infinite plans to collect more income from the assets by increasing rents. Some units within the portfolio have fallen below their market value.

“There is some good value add with coming lease turnover, following in the path of what the former owners have done,” Nahon said, noting his firm would pursue renovations of “individual units as needed just to bring them to current market standards.”

His company already had about 200 units under management across the three South Side neighborhoods, and is using funds raised to take advantage of opportunity zone tax incentives in the areas by building three-unit apartment structures, with each unit containing three bedrooms as well as parking and garages.

The firm has another 100 such units in similar buildings under construction now that will soon be a part of its rental pool, with the goal to add another 100 in its development pipeline by the end of the year, Nahon said.

“These buildings will add to our management in this space and give us a little more scale,” Nahon said of its assets purchased from ShainRealty.

The deal also follows the $26 million December sale of a 204-unit Kenwood apartments portfolio by investors Mendy Raskin and Jonathan Kranzler to New York-based Atlas Asset Management, another deal brokered by Interra’s Fryman and Stratman.

“There’s huge demand in that area,” Stratman said. “For this ShainRealty deal we had 10 offers and 15 tours within a few weeks. It’s hard to accomplish scale so soon. These guys and Raskin had spent a decent amount of time assembling these portfolios and somebody was able to capture them in one big sale. It can make the economics much better.”