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Investors are shopping so hard for multifamily properties that even companies on the coasts are taking an interest in former flyover zones. (They are also searching in caves and under lakes.) In early February, KBS Legacy Partners Apartment REIT, closed on the $27.2M purchase of Poplar Creek, a 196-unit apartment complex located in Schaumburg. The complex has no debt and is 95% occupied.
Poplar Creek
KBS senior managing director Kerry Nicholson says that besides liking the property above, the company likes Schaumburg as an economic hub—in Illinois second only to Chicago, he tells us, something that ought to give Rockford or Naperville pause. Also, there's the matter of municipal hostility toward new apartment development. For about a decade now, the Village of Schaumburg hasn't been allowing new apartments.
Reznick Intext CHI
Michael Christie, VP of investments at the Chicago office of Marcus & Millichap
Marcus & Millichap VP of investments Michael Christie (at brunch with his twin daughters, Emily and Nichole... try to guess which one is missing her front tooth) says that eagerness to snap up multifamily properties in places like the northwest suburbs isn't going to die down anytime soon. Occupancies and rents are going up, of course, but the real secret sauce whetting investors' appetites is money available at 5% or less in the form of 5-, 7-, and 10-year non-recourse loans. Cap rates on Class-A and B-plus apartments, he adds, are reminiscent of the peak of '06, ranging from 5% to 7.5%.