Interra Realty brokered the sales of two apartment buildings in Chicago’s South Shore neighborhood, priced at $4.23 million and $2.25 million. The buyers and seller of both properties were represented by the Interra team of co-founders and managing principals David Goss and Jon Morgan, managing partner Ted Stratman and directors Lucas Fryman and Jeremy Morton.
“Investors are drawn to South Shore because of its proximity to a number of cultural institutions and recreational amenities along the lakefront, as well as the neighborhood’s large stock of quality apartment buildings,” said Goss. “The multiple offers we received on these properties, along with declining capitalization rates, speaks to the confidence investors have in this area, especially as plans for the nearby Obama Presidential Center progress.”
The 50-unit vintage building at 6901 S. Paxton Avenue includes a mix of one-, two-, three- and four-bedroom apartments with 1:1 on-site parking, a rare amenity in the neighborhood. At the time of sale, the property was 94 percent leased. At $4.23 million, the transaction resulted in the second-highest price for a multifamily property in South Shore this year: $84,000 per unit, with a cap rate of 8.84 percent.
“The Paxton Avenue transaction is a true representation of investors coming into a market in search of stabilized assets with consistent financial performance,” said Stratman. “It also demonstrates how our in-depth knowledge of South Side neighborhoods like South Shore helps us identify the right entry points for buyer clients amid growing competition for deals.”
Previously intended for redevelopment into condominiums, the 29-unit building at 7250 S. Yates Boulevard has a mix of one-, two- and three-bedroom apartments and was gut-rehabbed just over a decade ago. Though the conversion was never completed, the units were upgraded with condo-quality finishes and features such as hardwood flooring, granite countertops and in-unit laundry. It was 93 percent leased at the time of closing and sold for $2.25 million.
“The above-average quality of the units relative to comps in the market allowed us to maximize interest in the property,” said Fryman. “As a result, we were able to secure a sale price that was $500,000 above what the seller had paid for the building just three years ago.”
Located just south of Chicago’s Hyde Park neighborhood and bordering Lake Michigan, the South Shore neighborhood offers easy access to the Museum of Science and Industry, the South Shore Cultural Center, the planned Obama Presidential Center in Jackson Park, a proposed 18-hole golf course designed by Tiger Woods and Rainbow Beach Park. Both 6901 S. Paxton and 7250 S. Yates are within walking distance of several CTA bus routes and the Metra Electric District line, providing service to downtown.