MZ Capital to buy West Loop apartments dinged by pandemic delivery

A West Loop apartment building is nearing a sale more than four years after its rocky pandemic-era delivery.

The Jax, a 166-unit apartment building at 1220 West Jackson Boulevard, is under contract by Northbrook-based MZ Capital Partners, headed by founder and managing principal Michael Zaransky, CoStar News reported. 

The 10-story building, located between Fulton Market and the Illinois Medical District, was developed by Chicago-based LG Development and Boston-based AEW Capital Management. A sale would help them repay a maturing $28.3 million construction loan from Wintrust Bank, according to Cook County property records.

The asking price wasn’t disclosed. The seller is represented by Newmark brokers Chuck Johanns, Liz Gagliardi, Susan Lawson, Joe Raucci and Bishop Polizzotto.

The property was completed in April 2020 and faced challenges due to the pandemic’s impact on demand for downtown apartments. The developers considered not opening it upon completion because of that timing, the outlet reported. They listed it last year, and it’s in a much better market position, amid robust demand and rent growth, although higher interest rates create difficulties for buyers.

The apartment building spans 129,000 square feet and is 97 percent occupied with average rents at $2,531 per unit, or $3.92 per square foot, according to CoStar. 

In the past year, Chicago has seen $874 million in multifamily property sales, reflecting a decline of less than 2 percent compared to the previous year, according to CoStar. This drop is modest compared to the more than 40 percent decrease in transactions across the Chicago metro during the same period. 

Two of the top three highest sales were near The Jax: Spanish billionaire Amancio Ortega, the founder of Zara, acquired the 492-unit tower at 727 West Monroe Street for $231.5 million last summer, and Tishman Speyer purchased the 357-unit Union West complex at 939 West Washington Boulevard for nearly $128 million. Additionally, former Blackstone executive John Schreiber is involved in a pending acquisition of the 227-unit Parker Fulton Market tower at 730 West Couch Place.

— Andrew Terrell