A New York investment group has sold six Kenwood apartment buildings for $26 million as it departs the Chicago market.
The firm, Raskin Risers, sold its 204-unit South Side apartment portfolio to Atlas Asset Management for $26.3 million, Crain’s reported. Mendy Raskin and his partner, Jonathan Kranzler, bought the buildings for $18 million during the pandemic, marking a 40 percent increase in value for the properties.
The buildings were financed with low-income housing tax credits to offer below-market rents to low-income Kenwood residents. The policy that limits the rents in the buildings will expire over the next few years, Atlas President David Pezzola told the outlet, meaning the buildings will likely be able to generate even more income in the future.
Buying the properties at the beginning of the pandemic when few investors were buying real estate allowed Raskin to make an inexpensive acquisition and a strong profit.
The portfolio includes properties at 4001 South Ellis Avenue, 4433 South Greenwood Avenue, 4737 and 4746 South Ingleside Avenue, 4500 South Drexel Boulevard and 811 East 46th Street.
Even as Raskin works to leave the Chicago multifamily investment market, other buyers are eager to get in. Hudson Valley Property Group last month spent $28 million on its first acquisition outside of the East Coast to pick up a 155-unit Bronzeville affordable housing portfolio nearby Atlas’ newly purchased assets, and is pouring at least $13 million more into renovations in agreements with government housing agencies that will keep the properties affordable well into the future.
Raskin and Kranzler invested about $1 million in the properties, on top of the purchase price and added more tenants with housing vouchers. Pezzola said Atlas plans to invest an additional $3 million in the buildings to bring them up to the city’s building code.
Raskin decided to sell everything it owned in Chicago, which, at its peak, was 1,000 apartments. Raskin and Kranzler still have about 300 apartments they need to unload. Their exit from the city was driven by Chicago’s rising property taxes and policies that make it too hard to evict tenants who violate leases.
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