S2 Capital Picks up Chicagoland Ovaltine Apartments for $94M

A sprawling Chicagoland apartment complex with a history as a chocolate factory once again traded since its last sale two years ago.

Dallas-based S2 Capital, a real estate investment manager, said it paid $93.7 million for the Ovaltine Court apartment complex, a 344-unit garden and loft-style multifamily community in Villa Park, a western suburb of Chicago. It marks the firm’s first investment in the greater Chicago area, according to a press release.

S2 funded the acquisition with a $60 million loan from Starwood Capital. The purchase price breaks down to $273,256 per apartment.

S2 paid 29 percent more than the complex’s last sale price In 2023, when San Francisco-based Stockbridge Capital sold it to New York-based Osso Capital for $73.1 million, as previously reported by The Real Deal.

Stockbridge, for its part, purchased the apartments a decade earlier for $58 million and spent $1.6 million on upgrades in that time period, records show.

Osso, led by former Blackstone executive Olivia John, also invested in the complex, funneling $785,000 in improvements and upgrades since 2024, according to a JLL marketing brochure.

Originally converted in 2001 from the historic Ovaltine Chocolate Factory that was built in 1917, the complex features loft-style layouts, 9-foot to 15-foot ceiling heights, and architectural character rarely found in suburban Chicago, according to the release.

The Ovaltine factory was the centerpiece of economic activity in Villa Park until it closed in 1985. The community is in DuPage County, a supply-constrained submarket with no new multifamily units currently under construction.

Monthly rents at the Ovaltine Court range from $2,000 to $2,800, and the complex has maintained average occupancy above 95 percent since Osso stepped in, JLL’s marketing brochure states.

S2’s acquisition is a major foray into the U.S. market, following several years of evaluation and underwriting across the Chicago region, according to the release.

Cole Stephens, S2 Capital’s managing director of asset management, residential, said in a statement that demand drivers such as the apartments’ historic character and tight rental market were among the reasons for the purchase.

Work is still needed on the complex. About 98 percent of the units remain unrenovated or only partially upgraded, providing S2 with the opportunity to “execute a comprehensive renovation program aimed at driving rental growth and enhancing resident experience,” according to the release.

Founded in 2012, S2 has acquired more than 51,000 units nationwide with deals totaling more than $13 billion, the release shows. The purchase was made through S2’s fully discretionary closed-end fund, S2 Real Estate Fund II.

Investors have poured roughly $4.8 billion into Chicago-area multifamily properties this year, already surpassing 2024’s full-year total of $3.9 billion, and marking the strongest volume since $5.9 billion traded in 2022, according to CoStar data.