As rents trend upward in Chicago, JAB Real Estate’s Frank Campise and Jim Jann cashed out of a mid-size apartment complex in Lakeview for $10.8 million, public records show.
An LLC backed by a trio of local investors — Jessice McDonogh, Sean Radler and Edward Mooney — bought the 19-unit property at 2848 North Seminary Avenue from JAB, records show. The deal came out to $568,000 per unit.
Chicago-based JAB bought the building for $4.8 million in 2016 and last re-financed it for $6.3 million in 2020, according to public records. Yet, total costs for the gut renovation of the property are unclear.
The renovated building now includes a mix of two-bedroom, two-bathroom units and larger three- to four-bedroom units, marketing materials show.
The latest per-unit sale price is part of a broader trend of mid-sized apartment complexes on the North Side trading for over $500,000 per unit. Essex Realty Broker Jim Darrow arranged the sale on behalf of the seller.
Campise said buyers are attracted to the market due to its strong rent growth amid constricted supply. And the North Side’s desirable amenities like the lakefront, Wrigley Field and easy access to downtown amplify demand, he added.
Late last year, JAB sold a ground-up development project in Old Town for $15.7 million, also brokered by Darrow. The apartment building with one ground-floor commercial space garnered interest from local and out-of-state buyers, Darrow said at the time. San Francisco-based Epp Properties ultimately bought the building. The sale came out to roughly $682,000 per unit, though the retail space slightly skews the per-unit estimate.
Also on the North Side, developer Michael Breheny’s Contemporary Concepts sold a 14-unit apartment building at 516 West Arlington Place in Lincoln Park that the firm developed to Utah-based Highland Partners for $10.3 million or $739,000 per unit, last May.
Still, Caprice said the supply-demand imbalance will be hard for developers to correct any time soon, as debt and construction costs remain high and the city’s recently strengthened Affordable Requirements Ordinance requires 20 percent affordable units in new developments, limiting returns. Chicago City Council increased the amount of affordable units required in most new developments from 10 percent to 20 percent in 2021.
“Capital flows to where there’s margin … So Chicago will inevitably get more capital allocated to it, and as a result, there will be more supply,” Campise said. “The issue is, will you get enough supply to offset the deficit in the amount of units we have? Until supply-demand imbalance is corrected, you’re going to continue to see stronger than expected rent growth.”
Developers’ chances of scoring financing for new projects got a boost in this week’s primary, however. Challenger Patrick Hynes’ ousted Cook County Tax Assessor Fritz Kaegi in the Democratic primary.
Industry pros watched the race closely because many believe Hynes will play a critical role in attracting investment back to Cook County amid a lending dry spell due to unpredictable tax bills during Kaegi’s tenure.