A New Jersey investor set the year’s price record for suburban Chicago’s apartment market this year with a $136 million acquisition in Naperville.
The Solomon Organization bought the 640-unit Fifteen 98 Naperville, at 1598 Fairway Drive, from San Francisco-based FPA Multifamily, DuPage County property records show, CoStar reported. The price works out to $212,500 per unit.
FPA had paid $98.5 million for the 34-acre property in 2017.
The sale price is the largest for a suburban multifamily deal since late last year, when a Hines affiliate paid $139 million, or $395,000 per unit, for Evanston’s 352-unit E2 towers. The price eclipses the $100 million ($340,000 per unit) that TLC Management paid for a 294-unit complex in Vernon Hills earlier this month, and the $109 million ($261,000 per unit) Abacus Capital paid for the 417-unit Railway Plaza in Naperville late last year.
Apartment rents in metro Chicago have surged on the back of a construction slowdown, putting the region second in rent growth among the 50 largest U.S. markets, per CoStar. Investors chasing yield have zeroed in on suburbs, where stabilized occupancies and strong rent rolls make trades pencil, even with higher interest rates.
Solomon, based in Summit, New Jersey, controls about 21,000 units across nine states. The firm financed the Naperville buy with a $91 million loan from Berkadia Commercial Mortgage. The 1984-built property — formerly known as the Addison of Naperville — includes 39 low-rise buildings with a 6.6 percent vacancy rate. Asking rents average $1,879 a month, or $2.11 per square foot, according to CoStar.
FPA has been active on both sides of the table in the Chicago market. The firm offloaded a Downers Grove complex for $72 million earlier this year, and last year, it paid $144 million for the Paragon tower in the South Loop along with $102 million for a 642-unit property in Hoffman Estates. It also recently picked up a 356-unit Naperville property for $68 million.— Eric Weilbacher
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