John Buck is hunting for an exit from a big piece of downtown Chicago real estate for the second time.
The Chicago developer has hired Newmark to market the 42-story Mila Chicago apartment building at 200 North Michigan Avenue, roughly one year after a deal fell through to sell the 402-unit asset, Crain’s reported.
Buck’s attempt to sell the property looks even more bleak than it did a year ago, before increased interest rates and banking failures pushed down property values across the city and nationwide.
Despite these obstacles, Buck remains buoyed by the robust demand for downtown apartments. Rental prices, which experienced a temporary decline during the early stages of the pandemic, have since rebounded to reach record highs. This suggests that renters are actively seeking dwellings in the city, even though foot traffic has decreased in downtown office buildings and retail establishments.
Although Buck was initially unable to find a buyer for Mila, the ownership venture has already profited from the tower. Buck, along with his partners Becker Ventures and Partners Group, refinanced the property in 2017 using a $150 million loan from Axa Equitable Life Insurance. This loan was used to pay off the initial $89 million construction loan, enabling the landlord to receive approximately $61 million in proceeds, the outlet reported. This type of refinancing strategy, known as cash-out refinancing, allows the landlord to benefit from the increased value of the property without selling it, thereby avoiding expensive capital gains tax bills.
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The potential sale price for Mila remains uncertain at this stage. In addition to Mila, Buck has also put other downtown properties up for sale, including a 38-story office tower at 33 North LaSalle Street in the Loop and a 25-story apartment building at 311 West Illinois Street in River North. Senior Managing Director Elizabeth Gagliardi from Newmark is leading the marketing efforts for the sale of Mila.
— Quinn Donoghue