Even with Chicago’s multifamily market faring better than most other regions, one recent transaction in the buzzy West Loop still resulted in a $5 million loss for apartments giant Waterton.
JAB Real Estate, run by Jim Jann and Frank Campise, paid $34.5 million to Chicago-based Waterton for the 81-unit midrise at 20 North Aberdeen this month, or about $5 million less than the seller paid to purchase it in 2017, according to Cook County records.
Jann and Campise, whose firm is also based in Chicago and buys multifamily in Denver, as well, used a $21.5 million mortgage from JP Morgan Chase when they bought the Aberdeen property Feb. 15, records show.
Waterton bought the property from a company tied to Chicago Bulls owner Jerry Reinsdorf, and put down $18 million in equity for the 20 North Aberdeen while assuming the Reinsdorf-backed firm’s existing $22 million loan, making Waterton’s total investment in the building $40 million.
Waterton hired Mark Stern, with JLL’s Managing Director for Capital Markets in Chicago, to market the building.
Representatives of Waterton and JAB did not respond to requests for comment.
Chicago’s relatively strong rent growth and lack of new supply in the pipeline has kept multifamily values afloat in an otherwise challenging commercial market. But some signs of distress have recently started to show, primarily due to rising interest rates.
Real estate firm CedarSt, for example, is losing money on two West Side buildings with strong occupancy and few concessions to renters because of floating rate loans pushing its interest close to 7 percent.
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Although the properties are currently watchlisted by the firm’s lender, CedarSt co-founder Alex Samoylovich said he does not plan on letting go of them anytime soon. Instead, the firm plans to refinance and hold onto the properties in hopes of continued rent growth.
Campise and Jann’s firm has been a dealmaker despite the tightening markets for debt. Last year, JAB sold a 56-unit Lincoln Park apartment building at 656 West Wrightwood Avenue for $14 million to Bill Silverstein’s firm Beal Properties. JAB has also been a buyer, such as when it paid $23 million in August 2022 for a Lincoln Park apartment complex that Campise had his eye on purchasing for two decades.