Rockwell lists Naperville apartments for $77M amid rent growth

Another day, another big multifamily listing in the Chicago suburbs, where rent hikes appear to outweigh rising interest rates.

The latest apartment complex up for sale is Chicago-based Rockwell Partners’ 356-unit Huntington Apartments in Naperville, Crain’s reported. 

The property, at 20 South Naper Boulevard, is 97 percent occupied and expected to carry a $77 million price tag, about $216,000 per unit, Newmark’s Chuck Johanns told the publication.

It’s the latest in a series of apartment complexes to hit the market in the suburbs lately, including 838-unit property in Arlington Heights.

Rockwell Partners’ asking price in Naperville would be on the high end of recent listings on a per-unit basis, and that seems to run counter to a trend toward newer development fetching more. The Huntington is 51 years old, but some back-and-forth on its status might explain the seemingly ambitious asking price.

A prior owner converted the complex to condos in 2007, on the cusp of the Great Recession, which soon hit and crimped sales.

In any case, the price looks to be a premium for Rockwell, which paid $34 million for a block of 313 units in 2016 and acquired the other 43 in individual deals with owners of the units that had been sold as condos, proceeding with a conversion back to apartments. Details of these deals are not known, but it’s likely the investors tab to buy the entirety of the complex was well below the $77 million asking price.

Another factor that likely figures into a premium is a $44 million loan on the property that a new owner could assume with a 3.6 percent interest rate that’s good until a 2029 maturity. Assumable loans have been highlighted in other multifamily deals lately. 

Apartment buildings throughout the Chicago area continue to draw buyer interest, running counter to trends in the area’s office market. The drumbeat owes largely to steady strength of residential rents, which rose about 4 percent for the year prior to start this year.

The trend is particularly pronounced in the Naperville/Aurora submarket on the western flank of the metro area, where rents were up 8.3 percent in the first quarter from a year earlier, for an average of $2.10 per square foot.

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