An apartment complex in Palatine, about 16 miles northwest of O’Hare Airport, sold for almost $140 million, a record for the Chicago suburbs.
Oak Brook’s Albion Residential bought the 612-unit Bourbon Square complex at Lake Cook Road and Illinois Route 53, Crain’s reported. The seller was Broadshore Capital Partners of Los Angeles.
Albion paid the equivalent of $228,000 per unit, Albion President Jason Koehn said. The sale netted a solid return for Broadshore, which acquired the property through a predecessor company that spent $97 million for it in 2014. The property was valued at $115.8 million in October 2019 and Albion plans to spend about $30 million to renovate the complex with new kitchens, bathrooms, flooring and amenities.
Albion financed the purchase with a senior loan from Wells Fargo and mezzanine financing from Walton Street Capital. Koehn wouldn’t say how much Albion borrowed, saying only that it covers about 65 percent of the acquisition and renovation costs.
The sale topped the $137 million that a fund managed by Turner Impact Capital paid in January for the 1,155-unit Ellyn Crossing complex in Glendale Heights.
“If I could have owned 10 Bourbon Squares I would have done so,” Broadshore CEO Brad Howe told The Real Deal. “It’s a really unique asset and an established, workforce-oriented property.”
Howe said the unit’s sizes, more than 1,000 square feet, are up to a quarter larger than many of the new apartment units under development in the area. A “significant renovation” of the property’s common areas and units over the eight years of Broadshore’s ownership helped enhance its cash flow, he said, declining to reveal how much was spent on the upgrades.
“We accomplished our business plan,” Howe said. “We generated a significant growth in the property’s income and accomplished the goal of our client,” an investor whom he declined to identify.
The property is about four miles northeast of another one that the company owns in Palatine, Albion on Northwest, formerly known as Birchwood on Sterling. Albion paid more than $100 million for that complex last September.
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