A Los Angeles investment firm made the biggest suburban Chicago apartment deal in history as part of its plans to expand in the windy city.
A fund managed by Turner Impact Capital paid $137 million for Ellyn Crossing, a 1,155-unit property in Glendale Heights, 30 miles west of Chicago, Crain’s reported. The deal marks suburban Chicago’s largest apartment deal both in price and in number of units, according to Real Capital Analytics.
The sale generated an 80 percent gain for Chicago real estate investment firm Rockwell Property, which paid $76 million to buy converted condos and rental units and make capital improvements at what was known as Stonegate Apartments.
Rockwell bought about a third of the rental units at Stonegate Apartments from residential development and construction firm Inland Group for $26.7 million in 2013. Inland paid $70.5 million for the complex in 2005 to partially turn apartments into condos amid a strong condo market.
When the condo market collapsed, leaving Inland with hundreds of unsold units, Rockwell bought 420 unconverted apartments for $26.7 million in 2013 and paid $14 million for 307 unsold condos four years later. In 2018, Rockwell bought out the owners of the remaining 429 condos that Inland sold for $28.4 million.
“It was rewarding in a number of different ways,” said Doug Fisher, Rockwell’s managing principal. “Yes, financially, but it was an extraordinarily messed-up property. It is light years from what it was when we bought it.”
A wave of condo deconversions has hit the city since 2015 with investors aiming to capitalize on the strong rental market amid sluggish condo sales. Rockwell turned a partially converted 356-unit housing complex in Naperville back into apartments about three years ago, according to the publication.
Turner, which specializes in affordable housing plans, owns more than 2,800 apartments in the Chicago area. Last year, Turner bought a 448-unit apartment complex in suburban Palatine.
[Crain’s] – Connie Kim