Marquette Companies Cashes out of North Shore Apartments

Hot demand, constrained supply and rising rents in suburban Chicago’s apartment market drove another top-dollar sale.

Naperville-based Marquette Companies sold Valley Lo Towers, a 112-unit complex in Glenview, for $45.5 million earlier this month, Crain’s reported. That’s $406,250 per unit.

The sale is part of a broader trend across the North Shore and surrounding suburbs, where slow construction pipelines and elevated interest rates are keeping renters in place and creating upside for landlords. It traded for roughly 33 percent more than the $34.1 million Marquette paid for it in 2018, public records show.

The buyer, Minneapolis-based Heartland Realty Investors, is a repeat investor in the region. The firm also owns apartment properties in Schaumburg, Lisle, Darien and Willowbrook. Its acquisition was financed with a $32.2 million Fannie Mae loan.

Northmarq arranged the financing, with Minneapolis-based Patrick Minea overseeing the loan, and brokers Alex Malzone, Parker Stewart, Dominic Martinez and Jake Lamb handling the sale.

Valley Lo Towers, at 1920 Chestnut Avenue, includes one-, two- and three-bedroom units. Built in 1987 and renovated in 2010, the property has benefited from steady rent growth in the Chicago suburbs, where the median net rent reached $2.14 per square foot in the first quarter, up 4 percent year-over-year, according to Integra Realty Resources.

The sale adds to a growing list of suburban multifamily transactions this year selling above previous purchase prices, bucking trends seen in Sun Belt cities like Austin and Nashville, which are reckoning with oversupply. Developers and landlords point to rising construction costs, soft office demand and long entitlement timelines as continued headwinds for new supply.

The limited pipeline has concurrently spurred a fresh crop of listings testing the multifamily market in and around Chicago, including Green Cities’ 263-unit apartment tower in Streeterville and PGIM’s 37-story West Loop tower.

— Judah Duke