More apartment towers are hitting the market in Chicago as the city and, more broadly, the Midwest, near the top nationally in rent growth, prompting droves of listings.
In Lincoln Park, condo deconversion specialists Yitzy Klor and Saul Kupperwasser of Strategic Properties of North America are listing the K Square Apartments at 1749 North Wells Street. And a bit further north, Waterton is listing the Montrose Apartments in Buena Park at 4334 North Hazel Street.
Both SPNA and Waterton tapped Berkadia brokers Nick Harris, Pete Evans and Richard Evans to market the buildings. The brokers and a representative of Waterton declined to comment on the listings and representatives of SPNA.
K Square Apartments
Klor and Kupperwasser are hoping to cash in on the 268-unit K Square property after they converted it from condos to rentals in 2018.
Skokie-based SPNA previously listed the building building with CBRE in 2023 but didn’t end up selling it. It’s unclear why the 22-story property didn’t trade hands at the time but it appears SPNA is ready to try again.
When the firm initially listed the property, it was fresh off of a separate failed deconversion deal at the Ontario Place condominiums in River North
The company had bought dozens of condos at the 467-unit building, after three years of negotiations, failed to close a $190 million purchase of the remaining units. The deal imploded in June 2023 when SPNA failed to put up $700,000 as a show of good faith to the remaining sellers.
Things haven’t been going much better since then. SPNA fumbled a second condo deconversion deal at 200 North Dearborn in 2024. The building’s condo board voted to terminate an agreement with SPNA to sell the building’s remaining units for $90 million after the company failed repeatedly to secure the financing needed to close the deal.
Still, the time could be right for SPNA to score a win with the sale of the K Square Apartments. Chicago’s multifamily market notched rent growth of 3.8 percent year-over-year in the second quarter, bested only by San Francisco’s 5.1 percent rate, according to Apartments.com data. Plus, Klor in May saved a deal that one of his firm’s affiliates looked set to lose to distress by getting a new $21 million loan for the 68-unit property at 1211 North LaSalle Street to resolve a foreclosure lawsuit.
While high interest rates have been tempering investors, SPNA is offering an assumable Fannie Mae loan that carries a 2.74 percent interest rate with a 2030 maturity date. The landlord refinanced the building with an $88 million loan in 2020 when rates were significantly lower than they are today.
The property was originally built as condos in 1971 before SPNA converted it into a standard rental building in 2018.
The Montrose Apartments
In Buena Park, multifamily heavy hitter Waterton is looking to offload the Montrose Apartments which the firm has owned since 2015.
Waterton purchased the 18-story, 287-unit building for $65 million, with a $61 million mortgage from JPMorgan. The deal came out to $226,000 per unit.
The building is anchored by a ground floor Jewel Osco grocery store in the up-and-coming North Side neighborhood.
Units range from studios to 2-bedroom and 2-bathroom units with footprints of 520 to 1,025 square feet. Rents currently range from $1,770 to $4,850, according to Waterton’s website.
The Chicago-based multifamily owner and operator has been active in the market recently with two recent purchases and one new listing.
Last month, the firm dropped $90 million to buy a 263-unit building known as the Mason in buzzy Fulton Market. The price came out to about $342,000 per unit. Over the summer, it made a $167 million purchase in the Los Angeles area of a 522-unit property.
Back in Chicago, Waterton earlier this year listed the 346-unit Grand Central apartments in the South Loop for sale, two years after acquiring it for $81.9 million.