Interra Realty, a Chicago-based commercial real estate investment services firm, announced it brokered the sale of 5424 S. Cornell Avenue, a 64-unit rental community in Chicago’s Hyde Park neighborhood. The $6 million sale price equated to approximately $93,750 per unit.
Interra senior managing partner Joe Smazal represented the private seller, while Interra managing partner Ted Stratman and director Jeremy Morton represented the buyer, Chicago-based Nautilus Investments, which is led by Sandeep and Carolyn Sood.
“This was the largest individual apartment building to sell in the Hyde Park neighborhood in 2018,” said Stratman. “The property was attractive not only because of its value-add potential, but also its number of units, which offers immediate scale in a high demand submarket.”
Built in 1924, the property comprises 61 studios and three one-bedroom apartments, which were 90 percent occupied at the time of the sale. A portion of financing was obtained through the Opportunity Investment Fund, set up by nonprofit lender Community Investment Corp. and Preservation Compact to preserve affordable housing in neighborhoods like Hyde Park that have experienced significant rent growth. The buyer plans to improve the property by updating both residences and common areas, setting aside 20 percent of the units as affordable for renters earning up to 50 percent of the area’s median income.
The property offers proximity to the lakefront, public transit and institutions including the University of Chicago and Museum of Science and Industry. Also nearby are Washington Park and Jackson Park, the future home of the Obama Presidential Center. That project, along with the planned redevelopment of the Jackson Park and South Shore golf courses under a design by Tiger Woods, has spurred interest in the area, giving rise to new retail and hospitality offerings. The Sophy, Hyde Park’s first boutique hotel, recently opened just a half-mile from the Cornell property.
“Hyde Park has been and continues to be a low-velocity market in terms of multifamily transactions, but we’re seeing an increase in investor demand in the neighborhood, especially as these high-profile developments begin to take shape,” said Smazal, who has brokered more than half of the apartment building sales that have occurred in the neighborhood over the past two years, per CoStar. “We continue to work with a variety of owners and investors, including those looking to maintain housing affordability as property values continue to climb.”