An apartment complex in Aurora has traded for considerably more than its last sale price despite the hike in interest rates since then, shedding light on the surging rental demand in the west suburbs.
Wisconsin-based MLG Capital bought the 272-unit Orchard Village apartment complex, at 1240 West Indian Trail, for just over $48 million, Crain’s reported. The price comes out to roughly $176,400 per unit.
National Property REIT, a venture controlled by New York-based Prospect Capital, sold the property. Newmark’s Chuck Johanns, Liz Gagliardi and Susan Lawson brokered the deal.
The deal was part of a 1031 exchange, allowing MLG to defer taxes on a property sale by reinvesting in a similar property. MLG did not disclose which property was sold to facilitate the exchange, although it did confirm that it was another Chicago-area apartment building.
The complex last changed hands in 2015, when a joint venture of Chicago-based Stadt Group and Buffalo-based Sinatra & Co. Real Estate paid $34.5 million, with the Prospect venture providing an equity investment. That’s 40 percent less than what MLG paid.
Despite spiked interest rates and tough lending standards hindering commercial property sales, Chicago’s suburban apartment market continues to attract investor interest due to strong demand and rising rents.
Net monthly rents in suburban Chicago rose to $2.06 per square foot in the first quarter, marking a 4 percent increase year-over-year, the outlet reported, citing Integra Realty Resources.
Investor appetite for suburban multifamily assets was evidenced with Orchard Village, which received 15 offers during the sale process, Johanns said.
“I think it’s just the ongoing strength of the underlying market,” Johanns told the outlet.
Elsewhere in Aurora, a venture of Standard Real Estate Investments and the Vistria Group bought the 416-unit Haven on Long Grove apartments and townhomes earlier this year for $94 million, or $226,000 per unit.
—Quinn Donoghue
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