A New York-based developer paid $55 million for a Lincoln Park apartment high-rise with plans to renovate.
Jonathan Rose Companies bought the 186-unit Webster House Apartments at 2150 North Lincoln Park West, the Chicago Business Journal reported. The price comes to $296,000 per unit, and the purchase expands Rose’s Chicago portfolio to 2,346 units.
JPMorgan Chase arranged $31.5 million in financing for the purchase and renovations, including $7 million allocated to immediate property improvements. CBRE’s John Jaeger, Justin Puppi, and Tim Flint represented the seller, while Rose handled representation internally.
“With our expanding presence in Chicago, we’re committed to preserving vital housing in high-opportunity areas like Lincoln Park,” said Nathan Taft, Rose’s chief investment officer. “This city has always been a key market for us, and we’re excited about our projects to ensure more Chicagoans have access to affordable, sustainable housing.”
Renovating isn’t a given in Lincoln Park, where teardowns are common because flexible zoning makes it easy to develop high-density multifamily.
The firm plans to start renovations early next year, in partnership with local developer Prairie Management & Development. The project will include roof replacement, façade repairs, modernized elevators, plumbing repairs and lobby enhancements.
The acquisition aligns with the firm’s mission to preserve and enhance affordable housing, Taft said. “Our focus remains on securing multifamily housing that is fully affordable or offers mixed-income, rent-subsidized, or naturally occurring affordable units,” he said.
Chicago’s multifamily investment market is strong, due to high demand for apartments and a limited development pipeline. Some properties have fallen into distress because of floating-rate debt affected by interest rate hikes, and unpredictable property taxes. But rent growth is ticking up. Rents averaged $3.61 per square foot in the third quarter for Class A apartments in central neighborhoods, marking a 2.3 percent increase from the same period in last year.
—Rachel Stone