Tishman Speyer is no longer solely an office landlord when it comes to Chicago.
The New York-based real estate giant, led by CEO Rob Speyer, ramped up its multifamily portfolio in the Windy City with one of the city’s largest purchases of the year. The firm paid $128 million for the 357-unit Union West complex at 939 West Washington Boulevard in the West Loop, Crain’s reported.
At about $359,000 per unit, the total sale price marks Chicago’s fourth-largest apartments deal of 2023. The priciest sale belongs to Spanish billionaire Amancio Ortega, whose family office paid $232 million for the 45-story luxury apartment property at 727 West Madison Street. Trailing that transaction are Crescent Heights’ $173 million acquisition of a Streeterville apartment tower and Antheus Capital’s $161 million purchase of Bronzeville’s Lake Meadows apartments.
Developed by a Zom Living-led joint venture and completed in 2019, Union West hit the market in June. It’s Tishman Speyer’s first residential acquisition in Chicago, adding to a portfolio that includes notable Chicago office towers such as 227 West Monroe Street, 222 West Adams Street and 525 West Monroe. It also owns the lab and office space building at 320 North Sangamon.
The deal was a “rare opportunity to take advantage of disrupted capital flows,” Tishman’s Nooshin Felsenthal told the outlet.
Rent growth has finally slowed down in Chicago after the city was close to leading the nation in the metric, and it’s expected to remain that way through 2024. However, appraisal and consulting firm Integra Realty Resources projects that rents will surge in 2025 due to high borrowing and construction costs, as well as a minimal amount of apartment projects slated for delivery.
“With Chicago’s multifamily market fundamentals maintaining solid performance, and an impending fall-off in new supply, Union West is well positioned to capitalize on continued growth and demand,” Felsenthal said.
Downtown Chicago apartments had an average occupancy rate of 93.6 percent through the third quarter, a tad below Union West’s 94 percent occupancy rate. Average rent at the site is $2,905 per month for a unit.
— Quinn Donoghue
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