Jason Weiss Drops $25M On Buffalo Grove Apartments

Jason Weiss sidestepped a tight lending climate by assuming the existing mortgage on a Buffalo Grove apartment complex.

A venture affiliated with the New Jersey-based investor bought the 154-unit Buffalo Creek Apartments at 70 South Buffalo Grove Road for $25.3 million, Crain’s reported. Weiss acquired the north suburban property from a joint venture of Chicago-based Ravine Park Partners and LV Property Management. Northmarq brokered the sale.

The deal highlights the appeal of long-term, fixed-interest rate mortgages that a buyer can assume upon purchase, as rising interest rates and wary lenders hinder property acquisitions and refinancing deals in Chicagoland. The Weiss venture will assume a mortgage rate of 4.67 percent, down considerably from current mortgage rates issued with new loans. Plus, the loan doesn’t mature until August 2033.

The purchase also sheds light on the strong demand for suburban apartments, including older properties like Buffalo Creek, which predominantly serve as workforce housing. As rental rates reach all-time highs, investors see potential in these assets. Median net rents in the suburbs rose 5.4 percent year-over-year in the second quarter, also marking a 23.3 percent increase from the second quarter of 2021, the outlet reported, citing data from Integra Realty Resources.

Ravine Park Partners and LV Property Management acquired Buffalo Creek for $11.4 million in 2011 and made significant capital improvements to the property, and returned money to investors through refinancing. The latest sale marks an exit for sellers who capitalized on appreciation over the years.

Buffalo Creek Apartments has an occupancy rate of 98 percent. The sale entails a first-year return, or capitalization rate, of slightly more than 5 percent, translating to nearly $1.3 million in net operating income during Weiss’ initial year of ownership.

Weiss, whose family investment firm used a 1031 exchange for the acquisition, continues to expand his apartment portfolio in the Chicago suburbs, also owning properties totaling 236 units in Yorkville and Oak Forest.

— Quinn Donoghue