Chicago developer John Buck is gearing up for the second time to sell his 42-story apartment building, Mila Chicago.
The property, located at the intersection of Michigan and Lake, will be marketed to potential buyers by Newmark Chicago, as reported by Real Capital Markets. Buck had previously struck a deal last year to sell the 402-unit tower, but unfortunately, the transaction did not materialize, according to Crain’s Chicago Business.
Undeterred by the prevailing conditions in the commercial property market, Buck is pressing on. Investor and lender interest in Downtown Chicago real estate has waned, while higher interest rates have escalated financing costs for prospective buyers, pushing down property values. Additionally, the recent downward adjustment of property taxes by Cook County Assessor Fritz Kaegi has cast a chill over the market.
Still, Buck can draw strength from the robust demand for downtown apartments. Rents rebounded after experiencing a temporary dip during the early stages of the pandemic and have since reached record heights—evidence that renters continue to seek units in the city, despite reduced foot traffic in downtown office buildings and retail establishments, according to Crain’s.
While rent growth has recently decelerated and concerns of a recession loom large, Buck’s listing will gauge investor sentiment regarding the future demand for upscale apartments along Michigan Avenue.
Even if a buyer for Mila proves challenging, the ownership venture has already reaped significant benefits from the tower, Crain’s reported. Buck, in collaboration with Michigan-based Becker Ventures and Swiss investment manager Partners Group, his project partners, refinanced the property in 2017 with a $150 million loan from New York-based Axa Equitable Life Insurance, allowing the venture to retire an $89 million construction loan utilized to construct the tower and enabling them to reap profits of up to $61 million.
The Mila project began construction in 2014, with the first residents moving into the building in May 2016.