Oak Residential Buys Chicago Area Apartments from FPA for $53M

Rick Wise is the second investor to recently turn FPA Multifamily — one the nation’s foremost buyers of apartments — into a seller of suburban Chicago property.

Wise’s Deerfield-based firm Oak Residential bought a 296-unit housing complex called The Mark in Glendale Heights from San Francisco-based FPA for $53 million this month, according to DuPage County records. The price comes to $179,000 per unit, and Oak used a nearly $38.3 million mortgage loan from Walker & Dunlop to fund the acquisition, public records show.

It’s the second time in weeks that FPA has interrupted an extensive buying spree spanning the nation — including several recent purchases of large assets in suburban Chicago — to offload one of its smaller properties in the area. Earlier this summer, Chicago-based investor Kurt Bender paid $28 million to FPA when the firm sold an 85-unit property in north suburban Vernon Hills.

Affiliates of FPA bought The Mark, at 1245 Fordham Drive in Glendale Heights, for $40.5 million ($136,000 per unit) in 2018, public records show, underscoring the growth in suburban Chicago prices and rents over the past few years even as interest rate hikes since 2022 have eaten into property values.

“Despite the challenges that arise in the real estate market, our team remains dedicated to identifying and capitalizing on opportunities that deliver strong returns for our investors and superior living conditions for our residents,” Wise said in a statement.

Investor interest isn’t likely to subside any time soon in the suburban multifamily market, after the Chicago area led the nation in rent growth for the first time in 20 years last year, with rents on track to keep rising as developers stay cautious and the development pipeline shrinks.

Year-over-year rents increased by 4 percent across suburban Chicago’s approximately 110,000-unit inventory so far this year, Integra Realty Resources found earlier this month. And the annual average addition of 2,500 new units of supply in the suburbs since 2015 is threatening to push the current 95 percent occupancy rate even higher.

The next wave of apartment deliveries isn’t expected to grow supply meaningfully until at least 2026, as developers remain in a holding pattern until financial markets shake loose on the heels of expected federal interest rate cuts. Until then, vacancy could reach historic lows in the Chicago multifamily market in 2025, Integra said.

With the acquisition of The Mark, Wise’s Oak Residential now controls two adjacent apartment complexes, after paying nearly $63 million ($187,500 per unit) for the adjacent 336-unit Monroe Apartments property at 1400 Oakmont in Glendale Heights. Both properties were completed in the late 1980s.

Oak plans to upgrade both unit interiors as well as common areas at The Mark, including by installing stainless steel appliances, quartz countertops, plank flooring and new energy-efficient lighting packages. New outdoor spaces and an expansion of the property’s fitness center are also planned.