CA Ventures selling Old Town apartment building amid multifamily listing uptick 

Troubled developer CA Ventures might have an easier time on its latest deal as it joins other real estate firms testing the waters of Chicago’s multifamily market.

The Chicago-based company recently hired CBRE to market North + Vine, a 261-unit apartment building the firm developed in Old Town. The property joins a trio of West Loop multifamily buildings that have hit the market in Chicago within the past year. 

CA Ventures CEO Scott Thomas declined to share an asking price but said the listing is an opportunity to test the market. 

John Jaeger, Justin Puppi, Jason Zyck and Danny Zebowski of CBRE were hired to market the property. 

CA Ventures took out a $65 million construction loan to build the 221,000-square foot property from PNC bank in 2018. Completed in 2020, about 30,000 square feet of the building on the ground level is retail space. 

Marketing materials show the residential portion of the property is 96% occupied and the retail portion is 58% leased. 

Even properties that maintain high occupancies and see rent growth can struggle with high interest rates and face tepid demand from potential buyers.

CedarSt had several multifamily properties land on lenders’ watchlists late last year due to low cash flow, as rising costs of floating-rate loans apparently cut into profits even with a reported occupancy rate of over 95%.     

Several properties that are currently on the market have similarly high occupancy rates. Among three large multifamily properties in the West Loop that hit the market in the past year, none reported an occupancy rate below 95%. 

Industry insiders say that the institutional investors that often account for a significant portion of the demand on large multifamily sales have been historically hesitant to invest in Chicago–a sentiment that is more pronounced in the current rate environment. On the other hand, buildings at lower price points may sell more easily because strong rental demand in select neighborhoods could draw strong interest from local players.

The overall rental market in Chicago is strong relative to other major U.S. cities. Halfway through 2023, Chicago led the nation in rent growth, as prices jumped 3.6 percent year-over-year, tripling the national average. 

Meanwhile, CA Ventures faces its own unique hurdles presented by a series of ongoing legal battles. Canadian REIT, QuadReal, is suing the company alleging that CEO Scott engaged in self-dealing while negotiating office leases at a building in River North. The company’s former COO J.J. Smith filed a lawsuit against CA Ventures along with several affiliates alleging he was lowballed when he tried to cash out equity in the business. And in the suburbs, lenders are taking the firm to court over stalled progress on a senior housing development.

The company is fighting many of the claims and Scott told The Real Deal in December that the pileup of legal battles are symptoms of a tumultuous real estate market rather than indicators of poor business practices.