Brookfield offloading massive Northwest Side apartment complex

Offers expected to hover around $150M, which would set record for Chicago suburbs

Brookfield Selling Huge Apartment Complex Near O’Hare
Newmark brokers Liz Gagliardi and Chuck Johanns with the Pavilion Apartments (Newmark, Google Maps)

One of the biggest multifamily deals ever in suburban Chicago is in reach for Brookfield Asset Management.

The Toronto-based firm has hired Newmark brokers Liz Gagliardi and Chuck Johanns to sell the 1,115-unit Pavilion Apartments at 5441 North East River Road, near the O’Hare International Airport on the city’s far Northwest Side, Crain’s reported.

While an official asking price has not been revealed, people familiar with the property expect offers to hover around $150 million, or $135,000 per unit, according to the publication.

Even if the five-building complex — which is technically within Chicago but competes with suburban properties — sells for a little less than that amount, it would set a record for priciest multifamily deal in the suburbs, surpassing the $139 million sale of Bourbon Square in Palatine last year.

Brookfield acquired the Pavilion Apartments in 2018 as part of its $6.8 billion acquisition of Forest City Realty Trust. Brookfield recently converted all 223 affordable units at the site into market-rate apartments.

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The 16-story complex is 97 percent leased and offers “naturally affordable” units, with an average monthly rent of $1,573. The property, featuring amenities like tennis courts, pools and a fitness center, generated over $7.8 million in net operating income in 2022, the outlet reported.

The large anticipated sale price highlights the robust apartment demand in Chicago, which has benefited from higher interest rates deterring home purchases.  However, the uptick in borrowing costs has made investors cautious, resulting in a 64 percent decline in national apartment sales during the first nine months of the year, the outlet reported, citing MSCI Real Assets.

The Pavilion, appraised at $186.2 million in 2018, currently carries a $92.7 million loan set to mature in March 2028. Its mortgage rate of 4.05 percent is far lower than newly issued loans these days, possibly enhancing the property’s appeal among prospective buyers.

Brookfield’s Chicago portfolio includes a number of high-profile Chicago assets like Oakbrook Center mall that it recently refinanced with a new $700 million loan, and the Northbrook Court mall slated for redevelopment. The firm also owns the Aloft at the Glen Town Center apartments in Glenview.

— Quinn Donoghue

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