Golub, Alcion List Apartment Tower in Chicago’s Gold Coast

Golub & Company and Alcion Ventures are looking to cash out of a Gold Coast multifamily asset after taking losses in the office market last year.

The investment partners are looking to sell One East Delaware, a 37-story apartment tower the firms spent $30 million repositioning, Crain’s reported.

The joint venture hired JLL to market the 304-unit building, which it purchased for $146 million ($480,000 per unit) in 2016. The property is 95 percent leased, with average asking rents of $3,143 per unit, or $4.10 per square foot, according to CoStar. JLL brokers Mark Stern, Kevin Girard and Zachary Kaufman have the listing.

Built in 1989, the tower sits in Chicago’s priciest residential neighborhood, but its success on the market is anything but guaranteed. The owners refinanced it with a $113.5 million loan in 2021 that’s scheduled to mature this November, though it’s unclear whether the term has been extended.

The listing adds to a long-running partnership between Golub and Boston-based Alcion Ventures, which have teamed up on multiple deals in Chicago.

Last year, they surrendered control of 300 South Wacker to Deutsche Bank after a failed sale and mounting debt pressure. That loss followed another handover of the suburban Oakbrook 22 complex earlier, signaling their broader shift away from office assets.

Downtown multifamily fundamentals have improved, with fewer than 300 units set to deliver in the area this year, a potential tailwind for rent growth. Still, capital markets remain stubbornly tight. A Golub-linked venture sold the neighboring Chestnut Place last year for about 20 percent less than its 2017 purchase price. That building, located across the street, traded for $85.2 million, or roughly $304,000 per unit.

The $30 million renovations to One East Delaware included unit upgrades and common-area improvements, part of a broader strategy to boost rents in a submarket with limited new supply.

The listing adds to a slow-but-growing trickle of institutional sales activity in downtown Chicago, as some owners test whether strong occupancy and stabilized rent rolls are enough to counteract higher financing costs.

Other buildings nearby have done more with less. Altitude Capital recently bought the Gold Coast’s largely unoccupied “phantom building” for $10 million, which is $222 per square foot, or $1.25 million per unit.

However, other investments haven’t been recouped. Interwest Capital Group sold the 165-room Claridge House hotel property at 1244 North Dearborn last Tuesday, though it doesn’t appear the buyer, an entity led by investor Jake Kurian, took out a mortgage to fund the transaction. It’s unlikely Interwest regained the $33 million total investment after its 2016 acquisition and $9 million in upgrades.

— Judah Duke