Breneman pounces on Reinsdorf-backed firm’s West Loop multifamily sales

Chicago Bulls and White Sox owner Jerry Reinsdorf is making more West Loop real estate plays near the United Center.

Investor Drew Breneman’s Chicago-based firm paid $17.9 million to buy the 47-unit apartment complex at 33 South Ashland Avenue from the Reinsdorf-backed Michigan Avenue Real Estate Group, The Real Deal has learned. The same seller is in the process of unloading the nearby 52-unit complex at 128 South Laflin Place, also to Breneman.

The transactions underscore the growing demand for housing in the West Loop, as property values for the assets appear to be on the rise despite a slowdown in big real estate deals driven by elevating interest rates.

To dodge the pain of taking out new financing amid rate hikes, Breneman assumed a $13.2 million mortgage originally taken out on the Ashland property by Michigan Avenue in 2018; it doesn’t mature for another five years, he said.

While Breneman declined to share details on the pending sale of the Laflin Place property, its previous mortgage was $15.1 million, taken out by an affiliate of Michigan Avenue in 2021. Breneman does not plan to assume that loan.

Breneman said his firm was lured by the West Loop’s rent growth, referring to the neighborhood as one of the nation’s strongest for the metric. Unlike the explosive growth experienced by some Sunbelt cities such as Austin and Phoenix, Chicago’s overall rental market has been steadier, he said.

“One great thing about Chicago is that the renters are very strong financially. In some of these other places, you don’t have as strong of a job pool,” Breneman said.

Michigan Avenue’s affiliate bought land for the property in 2017 for $4.6 million and took out a $15 million construction loan to build Adams Laflin. The firm also developed the adjacent 52-unit complex called Monroe Laflin Place. Breneman does not appear to be purchasing that property as part of the Adams Laflin deal.

Breneman’s two latest West Loop purchases from the developer come on the heels of recent land purchases led by Resindorf-backed LLCs directly next to the United Center.

This summer, Reinsdorf’s RE Holdings Group LLC bought two parcels that touch diagonally, at 1727 West Adams and 125 South Wood, about a block away from the stadium, for $17.2 million.

Requests for comment from Reinsdorf via Bulls and White Sox representatives were not returned. Attempts to reach other Michigan Avenue Real Estate Group leaders were not successful.

Last year, an LLC managed by Reinsdorf’s longtime associate Howard Pizer bought a vacant parcel for $5.5 million at the southeast corner of West Warren Boulevard and North Paulina Street.

Although it’s unclear how Reinsdorf’s recent transactions relate to any of Chicago’s pro sports teams, if at all, they are part of an ongoing flurry of activity in the Near West Side.

The Chicago Blackhawks organization, which also occupies the United Center, is planning to expand its Fifth Third Arena training complex at the intersection of Jackson Boulevard and South Wood Street.

The Blackhawks purchased vacant land at 303 South Damen Avenue to tee up that project, and have asked the city for approval to build up to 1,200 residential units and 663 hotel rooms two blocks south of the United Center, as part of a future phase of the Fifth Third expansion.

Breneman said the Ashland Avenue asset, known as Ashland Place, was appealing to his investors because he was able to assume the loan with a 4.6 percent interest rate.

The two deals were not the first time Breneman has worked with Michigan Avenue Real Estate Group. He purchased a 72-unit apartment complex called Madison Throop Place from the firm for about $33 million in 2020.

He said he was not surprised to find that the firm was selling Ashland and Laflin Place because, in his experience, it tends to develop new properties and sell them off a few years later. Ashland was built in 2018 and Adams Laflin was built in 2020.

Brokers Al Lieberman and Chris Draper of B. Riley Real Estate represented Michigan Avenue in the sales.

Editor’s note: The address of Ashland Place was updated.