Multifamily Investors Show Confidence in Chicago’s South Side

Recent South Side deals indicate investor confidence in multifamily amid a sluggish development pipeline.

Lincoln Avenue Communities, a California–based affordable housing investor, paid $31 million for the Drexel Towers Apartments, a 136-unit Section 8 complex at 4817 South Drexel Boulevard in Kenwood, Crain’s reported. The price equates to $227,900 per unit. TLC Management was the seller.

Meanwhile, New Jersey-based Antheus Capital shelled out $20.5 million ($165,300 per unit) for a 124-unit property at 5550 South Dorchester Avenue in Hyde Park. Laramar Group was the seller.

The deals marked profitable exits for the sellers.

Chicago-based TLC Management bought Drexel Towers in 2007 for $10.6 million. The firm invested “multiple millions” into renovations, and the sale was a financial success, CEO Stuart Handler said. Newmark broker Andrew Daitch represented TLC.

The buyer in that deal, Lincoln Avenue, specializes in rehabbing subsidized housing to increase rent values before selling associated tax credits to corporate and financial buyers. The firm owns more than 170 properties across 28 states.

Antheus Capital’s acquisition of the Hyde Park property adds to its large South Side portfolio, including the 1,869-unit Lake Meadows complex in Bronzeville. The seller, Laramar Group, bought the Dorchester building in 2016 for $14.7 million.

The purchases reflect ongoing interest in Chicago’s South Side rental market, particularly in areas like Hyde Park, where demand is bolstered by University of Chicago students.

More broadly, there’s a nearly 120,000-unit deficit in affordable rental housing citywide, according to a 2023 report from DePaul University, and that demand is driving investor activity.

Development is still hindered by high construction and financing costs, with limited supply creating new opportunities for market-rate and subsidized housing operators.

— Judah Duke