David Friedman is back to buying.
After notching Chicago’s priciest sale last year, in partnership with Ares Management, to Zara billionaire Amancio Ortega, the Skokie-based Friedman struck a $78.5 million deal to buy a big apartment complex in the region.
An affiliate of Friedman’s firm F&F Realty picked up the 288-unit multifamily property known as Northgate Crossing, at 200 Hudson Court in northwest suburban Wheeling, public records show. The property also includes 12 townhome-style units. Counting all 300 units, the price comes out to $262,000 per unit.
The seller was New York-based Azure Partners, led by Arthur Rosenberg and Michael Dennis, who look to have made a modest gain on the property’s appreciation. Azure paid a little more than $72 million for the property in 2018, when it bought the asset from its Chicago-based builder Reva Development Partners. The development was completed in 2016.
For Friedman, the deal marks its most noteworthy Chicagoland play on the buy side since its sale last year of a 47-story luxury West Loop apartment tower. That property’s elliptical shape stands out on the skyline at 727 West Madison Street, and fetched $232 million from Ortega’s family office, the biggest real estate sale of 2023 in Cook County.
It’s also more evidence of a fairly healthy suburban multifamily market in an otherwise tough environment for commercial real estate, due to interest rate hikes since 2022 that have restricted lending and eaten into property values of large assets. Friedman’s firm scored $51 million in financing from PNC Bank to help fund its Wheeling acquisition, records show.
Representatives of F&F and Azure didn’t return requests for comment.
Yet recent apartment sales inside Cook County — such as Northgate Crossing — haven’t appreciated in value as much as some assets in the collar counties, in part due to higher levels of uncertainty over commercial property tax assessments closer to Chicago that have deterred many investors.
Still, suburban Chicago’s apartment tenant demand is strong, notching nation-leading rent growth over the last year alongside scorching-hot Miami, amid a sharp slowdown in new multifamily development that’s poised to keep inflating rents for the next year, according to Integra Realty Resources’ 2025 outlook.
The same dynamic is expected to play out in the city as tight financial markets keep a lid on development. Integra predicts multifamily vacancy will reach historic lows as the next large wave of new supply won’t likely make landfall until 2027.
Friedman himself is trying to kickstart the development pipeline in Chicago, with a proposal in the works to redevelop a century-old, eight-story West Loop industrial building at 1060 West Van Buren Street into 325 apartments.
Azure last year also sold its only other suburban Chicago apartment investment, in a $103 million deal with Nuveen for the 336-unit Oaks of Vernon Hills property further north in the suburbs.
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