Multifamily developer CA Ventures has sold its biggest Chicago asset to walk away with $21 million. The buyer, an affiliate of Dreyfuss Management, also assumed CA Ventures’ debt on the property.
The deal for the 26-story, 102-unit property, at 8 East Huron Street, closed as Chicago-based CA Ventures aims to sell off assets and reposition itself as a buyer of opportunistic deals created by the fallout of the commercial real estate market.
The company was built as a high-volume developer, specializing in student and senior housing as well as standard construction, while also making some forays into office, industrial and even life sciences.
“We have shifted our strategy to buy versus develop,” CA Ventures CEO Tom Scott said late last month.
He and his company are facing multiple lawsuits. Last fall, the firm ceded control of a huge student housing portfolio to partner QuadReal, a Canada-based asset manager that is suing the landlord of CA Ventures’ LaSalle Street headquarters with a complaint that accuses Scott of self-dealing.
The Maryland-based buyer of the Huron Street property is Dreyfuss, led by JR Schuble and Mark Pacious. The company paid the $21 million on top of assuming a $41 million mortgage against the property, which CA Ventures took out from New York Life Insurance Company in 2016. The loan had a remaining balance of $39 million at the time of the debt assumption agreement, which closed late last year, according to public records.
Dreyfuss didn’t return a request for comment.
The deal extends a Chicago-area selloff for CA Ventures that has moved smaller North Side multifamily assets to individual buyers. It also offloaded a large, multi-state senior housing portfolio that the firm developed and owned in partnership with Goldman Sachs, according to public records.
While CA Ventures leaders John Diedrich and Scott were unavailable to comment on the 8 East Huron deal, they previously said they had planned to sell off assets in order to reposition, as pressure and lawsuits from investors mounted last year.
Some investors in the firm say they haven’t received cash distributions for two years. A group of investors who loaned money to the firm are suing, alleging CA Ventures defaulted on the nearly $10 million in loans they provided. A CA Ventures affiliate is also delinquent on a $75 million debt tied to an apartment complex it developed in the northwest Chicago suburb of Arlington Heights and is working out a plan to settle it.
Ohio-based publicly traded healthcare real estate firm Welltower bought the senior housing portfolio from the Goldman Sachs and CA Ventures joint venture, and it included the 128-unit property at 370 North Weber Road in the southwest Chicago suburb of Bolingbrook.
Further details of the senior housing deal weren’t available in SEC records, and Goldman and Welltower didn’t comment.
Senior housing has been a painful point in CA Ventures’ portfolio because of the pandemic, Scott has said. Many properties couldn’t lease vacant units for 16 months, until vaccinations became available, he said. Interest rate increases since then created a difficult situation for real estate investors. Higher cap rates have caused developers to lose money, Scott said.
“Ultimately, the institutional investor drives the sale timeline on ventures like this one, and they opted to liquidate here,” Diedrich said last month.
Editor’s note: This story has been updated to correct the defendant named by QuadReal’s lawsuit involving CA Ventures’ LaSalle Street office lease, and to correct the spelling of JR Schuble’s surname.
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