Chicago’s Multifamily Players Wading Through Ups and Downs

There’s no disputing that Chicago’s multifamily market is on the rise.

But even as the Midwest’s investment profile is surging as a development dropoff allows landlords to push rents against falling supply, some players are still stuck in quicksand or finding trap doors while financing markets still present challenges.

Take Chicago-based Bradford Allen, which is scrambling to save a $1.9 million escrow deposit put up to try to close its $38 million offer on a Bucktown rentals complex, after it failed to get a loan by a March due date, according to local real estate sources. Bradford Allen last week filed a lawsuit alleging the property’s developer, locally headquartered CRG, wasn’t forthright in its negotiations or property management while under contract, and that the would-be buyer should be able to claw back its deposit despite cancelling the transaction.

Plus, developer Mitch Goltz has sold a development site for the delayed, $110 million project at the former People’s Gas site in the Northwest Side’s Portage Park neighborhood. The new owner, Elmhurst-based Prairie Ridge Development, is scaling back the proposal from 346 housing units in one six-story building, to 253 units spread across two buildings — one four-story building with 213 units and a three-story building with 40 units. At the same time, Goltz has been a buyer, including for distressed Oak Brook office property.

Then there’s Marty Paris, a condos and apartments developer who just gave back a second Chicago property to a lender while still jousting with other lenders and the village of River Forest over more properties in his firm Sedgewick’s portfolio. Most recently, he surrendered a package of condos at a South Loop building to settle a $12 million mortgage. And he’s suing divorce lawyers for alleged malpractice in a case that landed him in jail.

However, it’s far from all bad news, as lenders begin to reopen the spigots for Chicago while it’s among the nation’s leaders in rent growth.

Development teams including Mike Drew’s Structured and Adam Friedberg’s Mavrek reeled in over $350 million in refinancing deals for Chicago multifamily projects in recent weeks.

Drew’s firm and its partners pulled in the second of two big loans totaling $199 million that they landed this summer to refinance debts at their multi-phase Lincoln Park project.

And Mavrek retired a $102 million construction loan for its Streeterville project known as the Saint Grand, with a new $106 million loan.

What’s more, Pacific Life Insurance is dipping into the market with a big West Loop apartment tower listing, showing institutional owners are ready to test the waters as Chicago multifamily pricing increases.

In the residential market, a new St. Regis resale listing has a 91st-floor condo owner bracing for a loss of over $1 million after paying $9.2 million for the unit back in 2022, a price that was briefly the Chicago skyscraper’s largest.