Interra Realty has arranged the $2.475 million sale of 20 units at 4901-4907 N. Kenmore Avenue, a 22-unit multifamily property in Chicago’s Uptown neighborhood currently functioning as a condo building with a board and association in place. In addition, Interra arranged the $2.65 million sale of 6439-6445 N. Richmond Street, a 24-unit rental community in the Rogers Park neighborhood.
Interra senior managing partner Brad Feldman represented the confidential seller and buyer of 4901-4907 N. Kenmore, whose 20 unsold units were already being rented out. The buyer, an experienced local real estate operator that acquired the units from a single owner, plans to renovate the property and raise rents to market rate. With control of the property’s condo board, the new owner plans to deconvert the building from condos to apartments, a process through which it would acquire the remaining two units.
“Heading into the last quarter, it’s great to see continued strong velocity for Chicago middle-market properties,” said Feldman. “That goes for all neighborhoods, from Logan Square to Rogers Park and Evanston, and for regular sales as well as deconversions. Despite the challenges and hurdles of working in a pandemic, Midwest multifamily buildings have remained solid investments throughout 2020 and we expect that to continue in 2021.”
Built in 1898, 4901-4907 N. Kenmore’s 20 units, six of which are duplexes, included 11 one-bedrooms, six two-bedrooms and three three-bedrooms. The units were 75 percent occupied at the time of the sale. The buyer plans to install a new roof, complete tuckpointing and masonry work, and gut-renovate units to a condo-quality level.
“At $123,750 per unit, this was a strong price for an Uptown building in need of significant upgrades,” said Feldman. “Investors continue to seek value-add deals, including candidates for deconversions. By acquiring a block of units simultaneously, they are able to meet the higher approval threshold of 85 percent now required for deconversions in the city.”
The property is near Uptown’s shopping, restaurants and nightlife as well as Lake Michigan and offers easy access to the CTA Red Line and Lake Shore Drive.
Feldman also represented both the seller and buyer of 6439-6445 N. Richmond, securing almost 30 showings with qualified investors and seven written offers. Built in 1932, the asset has 14 one-bedroom and 10 two-bedroom units and was fully occupied at the time of sale. The new owner plans to tuckpoint the exterior, brighten foyers and hallways and update some units over time.
“We’re still seeing good buyer interest in Rogers Park, and this building represented a solid price per unit for a more vintage property,” said Feldman. “The building traded at a 6.22 percent cap rate, slightly below the average rate of 6.75 percent in Rogers Park, but the owner will be able to push rents, as there are a lot of long-term tenants. Although the original buyer fell out of contract due to COVID-19, the value-add component quickly attracted another investor, and we were able to close at almost the same price.”
The property offers proximity to several bus routes, including those connecting to the CTA Red, Brown and Blue lines.