This Week's Chicago Deal Sheet

Chicago-based Origin Investments and its joint venture partner Randolph Street Realty Capital got a tidy return by selling The Iroquois Club, a 272-unit community at 1101 Iroquois Ave. in west suburban Naperville, for $69.8M to TLC Management.

The partners bought the property for $38M in 2015 after a previous owner’s plan to convert it into condominiums stalled out. The big profit garnered by the sale shows the strength of the suburban multifamily market, according to Marc Turner, Origin’s managing director of investment management.

“We accomplished the comprehensive business plan we established for The Iroquois Club,” he said in a statement. “Having done that, and with a capital markets environment that is extremely favorable for suburban multifamily assets, it was an ideal time to sell and provide some very good returns to our investors.”

The sellers completed improvements on about 60% of the units, including some complete makeovers. At the time of sale, 97.4% of the units were occupied, roughly equal to the rest of the suburbs, according to Turner, citing Axiometrics data.

Marty O’Connell and Wick Kirby with JLL represented the Origin/Randolph Street joint venture in the sale of The Iroquois Club.

Origin has been on a hot streak, selling two other suburban multifamily developments in the past 120 days. Along with its partner Randolph Street, in October it sold One Nineteen on Main, a 49-unit multifamily property with ground-floor retail space in downtown Naperville, to Friedkin Property Group. Also in October, Origin and partners Draper and Kramer and LEM Capital sold The Clayson, a 448-unit multifamily complex in Palatine, to Turner Impact Capital.

O’Connell, Kevin Girard, Kyle Butler and David Gaines represented the sellers on the One Nineteen on Main and The Clayson sales.

EXECS

The West Central Association – Chamber of Commerce, a group of more than 400 businesses and organizations in more than one dozen neighborhoods west of downtown Chicago, named Carla Agostinelli as its new director of development and community partnerships. Agostinelli most recently served as executive director of the West Loop Community Organization, where she served as adviser on the city of Chicago's Recovery Task Force, oversaw the Fulton Market streetscape initiative, curated both Taste of Randolph and the Fulton Market Expo, and led hundreds of community meetings.

SALES

A joint venture partnership between Oak Brook-based investor Clear Height Properties and Harbert U.S. Real Estate acquired a 131K SF, four-building industrial portfolio at 4725 and 4735 West 135th St. and 13500 and 13530 South Kenton Ave. in south suburban Crestwood. Nineteen tenants with leases ranging in size from 3K SF to 23K SF occupy 88% of the portfolio. The brick-masonry buildings were completed in 1991. Walter Murphy of Lee & Associates represented the seller.

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Accurate Perforating Co. bought 4620 West 19th St., a 130K SF manufacturing facility in west suburban Cicero. The seller is a private individual who operated a business at the property for 31 years. Accurate Perforating plans to give new life to the manufacturing plant and transfer more than 100 jobs to the location. Frank Melchert and Matt Garland of Cawley Chicago represented the building owner.

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A physician partnership group that developed Advocate Aurora Health Medical Building at 1020 35th St. in Kenosha, Wisconsin, sold the facility for $6.2M to a commercial real estate investment company. Aurora Medical Group, a subsidiary of Advocate Aurora Health and MH Imaging, occupies 100% of the 19K SF facility. Physician Real Estate Capital Advisors’ Scott Niedergang and Nathan Glaisner of Verde Investments represented both the seller and buyer.

LEASES

VTS signed a 36K SF lease at Tishman Speyer’s 320 North Sangamon St. in Chicago’s Fulton Market district. VTS, a New York-based software firm for the commercial real estate industry, currently leases a small office at 312 North May St. in Fulton Market. It needed more Chicago space after its March 2021 acquisition of Chicago-based Rise Buildings. VTS was represented by Savills’ Robert Sevim, Jim Wenk, Cullen Hurley and Allison Buck. Designed and developed by Tishman Speyer, 320 North Sangamon St. was completed in 2021.

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Axiom Consulting Partners doubled its space by signing a lease for 20K SF at 200 West Adams St. in Chicago. The firm currently leases about 10K SF in the building. Colliers Chicago’s Tony Karmin and Cresa’s Michael Marrion negotiated the long-term expansion and extension on behalf of the management consulting firm.

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Healthcare provider VillageMD signed a lease for 53K SF at The Old Post Office. The firm will use roughly 48K SF as office space, with the remainder going toward establishing a clinic on the first floor. The Old Post Office was originally built in 1921 but opened its doors to a new generation of tenants in November 2019 after undergoing an extensive renovation. Other tenants in the 2.5M SF building include Uber, Walgreens, Ferrara Candy Co. and HomeChef. Jamey Dix, Matthew Whipple and Daniel Heckman of Telos Group represented ownership in the transaction. Phil Geiger, Matt Greaney, Amy Berg and Scott Merz from JLL represented VillageMD.

CONSTRUCTION AND DEVELOPMENT

Structured Development launched the second phase of Harrison Row Townhomes, an affordable for-sale community at Harrison and Francisco streets in Chicago’s East Garfield Park neighborhood. Created under Chicago’s Affordable Requirements Ordinance, the 33 homes will be priced from $245K, built and reserved for households earning up to 120% of the area median income.

Buyers will be sourced through the Chicago Community Land Trust, a nonprofit corporation administered and staffed by the Chicago Department of Housing. Twenty-eight of the units will be modular townhomes assembled by Chicago-based Kinexx Modular Construction off-site in its Southwest Side factory. Including on-site installation, these homes can be completed in about 90 days.

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Kinzie Builders plans to start construction on five new multifamily developments in the Chicago area early this year. In total, the general contractor is scheduled to build 91 rental townhomes and 356 apartments across Chicago’s Galewood and West Town neighborhoods and in the suburbs of Crystal Lake, Mount Prospect and Oak Forest.

The five projects breaking ground this year are:

• Crystal Lake & Main — This 99-unit community near the Crystal Lake Metra rail station was designed by BSB Design and will include apartments and townhomes. Its developers are Hamilton Partners and Harlem Irving Cos.

• HQ Residences — This 88-unit rental building is located across from the Mount Prospect Metra station in downtown Mount Prospect and designed by OKW Architects. Its developers are Harlem Irving Cos., Hamilton Partners and T2 Investment.

• 157th & Cicero Residences — This 90-unit community of apartments and townhomes was designed by OKW Architects with Deshe Real Estate Group serving as the developer.

• Galewood Residential — Also designed by OKW Architects, Galewood Residential will offer 125 apartments and 25 townhomes near the Mont Clare Metra rail station on the city’s Northwest Side. Harlem Irving Cos., NOVAK Cos. and Hamilton Partners are the developers.

• Wolcott Lofts — This 20-unit rental project in the city’s West Town neighborhood will feature both new construction and the renovation of an existing building. Wolcott Lofts is being developed by Harlem Irving Cos. and designed by Space Architects + Planners.

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McShane Construction Co. was selected by Over the Rainbow to help design and construct Kirwan Apartments in north suburban Waukegan. The 24-unit affordable housing residence is designed to allow disabled adults to live independently. Located on a 1-acre site adjacent to Over the Rainbow’s Gustafson Apartments, the three-story, wood-frame building will feature a Hardie panel exterior. McShane’s engineers collaborated with the owner and architect Weese Langley Weese Architects throughout the design and pre-construction phases and plan to complete the project by January 2023.

THIS AND THAT

The amount of available sublease office space in Chicago’s Central Business District increased by 137K SF between the start of the year and the end of February 2022, according to MBRE. Despite a slight quarter-to-quarter contraction between Q3 and Q4 2021, the latest increase brought the amount of available sublease space to a historic high of 5.8M SF, an 80% increase over Q1 2020.