Skip to content
Homepage
  • Market
    • Illinois
    • Indiana
    • Iowa
    • Kansas
    • Kentucky
    • Michigan
    • Midwest
    • Minnesota
    • Missouri
    • N Dakota
    • National
    • Nebraska
    • Ohio
    • S Dakota
    • Tennessee
    • Texas
    • Wisconsin
  • Events
  • Sector
    • CRE
    • Finance
    • Healthcare
    • Hospitality
    • Industrial
    • Legal
    • Multifamily
    • Net Lease
    • Office
    • Retail
    • section
    • Seniors Housing
    • Student Housing
  • Advertise
  • Real Estate Awards
  • Login/Register

Multifamily investors finding value in markets like Kankakee

Matt Baker May 21, 2019
Share on Facebook Share on Twitter Share on LinkedIn Share via email

The Kankakee-Bourbonnais-Bradley metropolitan area is a microcosm, 30 square miles or so of built-up urban area surrounded on all sides by farmland. It’s semi-independent of the Chicago area as it has its own economy but also plenty of residents who commute north for work.

For investors targeting multifamily properties, does the Kankakee area hold any value? This is one market where the highs aren’t as high but the lows aren’t as low, so there are opportunities out there if you know where to look.

Last fall, Marcus & Millichap brokered the sale of Rivers Edge Apartments, a 36-unit apartment property in Kankakee. Ryan Engle, a senior vice president, investments with the firm, represented both the seller and buyer in the transaction along with his colleagues, first vice president investments Andrean Angelov and associate Bryan W. Kunze. This deal is fairly indicative of how some investors are targeting the area.

Located on the banks of the Kankakee River at 991 N. River Drive, the 1970s-era property is comprised of 20 one-bedroom/one-bathroom units, four two-bedroom/one-bathroom units and 12 two-bedroom/two-bathroom units.

“We had a lot of interest, but rents are very depressed as a whole in comparison to Chicago markets,” Engle said. “However, there’s good value there. The returns you can get are still really good, so that’s one of the reasons that people are chasing some product down there.”

According to Engle, there’s a dearth of large multifamily properties in the Kankakee-Bradley-Bourbonnais region, at least as far as newer construction is concerned. Most of the product that has been built over the past few years is made up of four- to 12-unit properties.

That’s why an asset such as Rivers Edge is a relatively attractive investment for the area. Not only does it have 36 units, it offers tenant amenities like an elevator, balconies or patios for each unit, ample off-street parking, an on-site laundry facility and views of the river. Additionally, I-57, the Kankakee Amtrak station and Olivet Nazarene University are all within a three-mile radius.

The property has an average rent of $800, which makes it very affordable in comparison to the Chicago area. The building is representative of the region as a good option for residents who are more budget-conscious and willing to suffer a longer commute. Certain investors are willing to chase these properties as well.

“I think that’s what the draw is,” Engle said. “The people going to those markets, a lot of them aren’t able to find a decent property in the Chicagoland area where they can get over an 8-cap. So they’re willing to push out a little farther and get a little bit better yield.”

In the end, Marcus & Millichap was able to close the Rivers Edge property at $1,617,000 last October, with an 8.27 cap rate, according to Engle. Proof that, like residents, some investors are willing to travel some distance from Class A product in the downtown core to find a decent deal.

According to U.S. Census Bureau data, Kankakee County had an estimated population last July of a little more than 110,000, a 3 percent decrease from 2010. Of course, Illinois on whole has been hemorrhaging residents for five straight years.

While the state’s population loss is worrisome for the general economy as a whole, along with commercial real estate, investors haven’t yet given up on finding value here. And that includes markets outside of Chicago, like Kankakee.

Tags
BourbonnaisBradleyChicagoIllinoisKankakeeMarcus & Millichapmultifamily
" "

Subscribe

Subscribe to our email list to read all news first.

Subscribe
Related Articles
NationalFinance

Walker & Dunlop adds chief production officer for FHA loans

March 3, 2021
TexasMultifamily

Greystone|Investment Sales Group closes sale of 137-unit apartment community in Dallas

March 3, 2021
NationalOffice

The office market is already making a comeback

AJ LaTraceMarch 3, 2021
IllinoisCRE

HKS announces new hires and promotion for Chicago office

March 3, 2021

Subscribe

Subscribe to our email list to read all news first.

Subscribe
REJournals logo

Market

  • Illinois
  • Indiana
  • Iowa
  • Kansas
  • Kentucky
  • Michigan
  • Midwest
  • Minnesota
  • Missouri
  • N Dakota
  • National
  • Nebraska
  • Ohio
  • S Dakota
  • Tennessee
  • Texas
  • Wisconsin

Sector

  • CRE
  • Finance
  • Healthcare
  • Hospitality
  • Industrial
  • Legal
  • Multifamily
  • Net Lease
  • Office
  • Retail
  • section
  • Seniors Housing
  • Student Housing

Subscribe

Subscribe to our email list to read all news first.

Subscribe
  • Contact Us
  • Events
  • Advertise
  • Office Locations
© 2021 REjournals.com