Darren Sloniger’s Marquette Cos. and a Deutsche Bank affiliate are shopping a West Loop apartment, testing a market in flux.
Naperville-based Marquette and DWS Group have hired CBRE to sell Catalyst, a 20-story, 223-unit property at 123 North Des Plaines Street that opened in 2014, just prior to the West Loop’s emergence as Chicago’s hottest development markets, Crain’s reported.
An asking price wasn’t included in marketing materials, and Sloniger declined to say how much he expected a buyer to pay for Catalyst. The building was valued at $114.6 million, or $514,000 per unit, in 2014, according to research firm MSCI Real Assets.
The outcome of the Catalyst offering will help investors gauge the direction of the market. The multifamily sector in Chicago has been strong and supported rising apartment values that have handed sellers some big profits during the pandemic.
But landlords are competing with an expanding supply, especially in the West Loop area where 9,065 units were planned or under construction as of last March. Plus, rising interest rates, a strict lending climate, crime and fears of a possible recession have pushed property values down and made investors wary.
For some, Chicago’s political landscape is another cause for concern. Newly elected mayor Brandon Johnson has proposed progressive policies that would more than triple the one-time transfer tax paid to the city for property sales of $1 million or more, as well as other taxes that have raised concern among real estate business groups.
Built nearly 10 years ago, the Catalyst could attract investors who seek out opportunities to fix up apartment buildings and then raise rents.
“I think everybody feels like it’s a great value-add opportunity because it was developed in 2013-2014,” Sloniger told the outlet.
In addition, the building is 94 percent leased. Monthly rents range from $2,280, or $3.84 per square foot, for a studio apartment to $5,136, or $3.27 per square foot, for a three-bedroom unit.
— Quinn Donoghue
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