Rai Sahi’s Morguard North American Residential is placing a bet on continued growth in Chicago’s gentrifying Cabrini-Green neighborhood, paying $81 million to add a luxury apartment tower to its portfolio.
The Ontario, Canada-based real estate investment trust bought the 18-story, 240-unit Xavier Apartments at 625 West Division Street from Portland, Oregon-based developer Green Cities. Morguard disclosed the acquisition and touted the property’s proximity to retail, entertainment, employers and future development.
The Near North Side neighborhood, previously home to the Chicago Housing Authority public housing towers demolished between 1995 and 2011 due to hostile living conditions, has experienced a wave of residential and retail development in recent years. It also boasts an average rent of $2,511, higher than the citywide average of $2,215, according to RentCafe.
It appears Green Cities made between $35 million and $50 million from the deal. The firm reported construction costs of $33 million for the project, according to city permit data from 2014, though the developer got a $45.3 million construction loan for the project. The company did not respond to a request for comment.
Green Cities hired CBRE to sell the apartment building last summer; John Jaeger and Justin Puppi were the brokers. Jaeger called the deal “a good benchmark for Chicago” in a LinkedIn post.
Xavier Apartments offers studio, one-bedroom and two-bedroom units ranging in price from $1,848 to $3,450 a month. The building is Morguard’s first property on Chicago’s Near North Side, the firm’s John Talano said in a statement.
Morguard’s other Chicago assets include the residential high-rises Echelon Chicago, Alta at K Station, Coast at Lakeshore East and Marquee at Block 37, which with Xavier Apartments total 2,643 units and about $950 million in value, according to the firm.
Green Cities still owns several large downtown Chicago commercial real estate assets, including the 199-unit EMME property in the West Loop at 165 North Des Plaines Street, the 263-unit asset at 420 East Ohio Street and the 722,000-square-foot office building at 200 West Adams Street, the firm’s website shows.
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