This Week's Chicago Deal Sheet

Morgan Properties snapped up more than 1,000 suburban apartments for about $181M from Norfolk, Virginia-based Harbor Group International, part of a sweeping deal that shows continued strength for suburban multifamily investment.

The Illinois portfolio comprises 428 units at The Lakes of Schaumburg in northwest suburban Schaumburg, 371 units at Blackhawk Apartments in northwest suburban Elgin and 204 units at The Gates of Deer Grove in northwest suburban Palatine.

With the addition of these communities, Morgan Properties owns and operates 1,765 units across the Chicago suburbs.

“We remain bullish on the fundamentals of the multifamily industry and are extremely well positioned to capitalize on portfolio acquisition opportunities," Morgan Properties President Jonathan Morgan said in a release. "We are excited to achieve another milestone in growing our portfolio to 95,000 units and we will continue to target opportunistic deals in our acquisition efforts." 

The Chicago-area acquisitions are part of $410M in purchases for the firm, which bought five more apartment properties consisting of nearly 2,000 units for a total of $229.3M in Indianapolis, according to public records reported by The Real Deal.

PEOPLE

Josh Tremblay is joining Wight & Co. as principal of its corporate and commercial interiors practice. Tremblay will bring his experience in architecture, product design and business development to expand the marketplace and help clients navigate the ongoing evolution of shared spaces. 

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James Brescoll, previously with Bryan Cave Leighton Paisner from 2018 to 2021, has rejoined the firm as a partner in the Chicago office. Brescoll joins from Riemer & Braunstein and brings experience in real estate financing, acquisitions and dispositions, leasing, development, joint ventures and construction. He has experience representing financial institutions, REITs, real estate funds and developers.

SALES

Essex Realty Group facilitated the sale of 2904 West Belmont Ave., a 21-unit multifamily building in Avondale. Essex President Doug Imber and principal Kate Varde represented the buyer, who purchased the building for $7.8M. With proximity to Interstate 90 and the CTA Blue Line, the property was originally developed as condominiums in 2008 and has since been converted to two- and three-bedroom apartments averaging 1,500 SF.

CBRE has arranged the sale of a Fulton Market loft office at 217 North Jefferson St. The 59K SF boutique property was sold to a private buyer for an undisclosed price. CBRE’s Keely Polcynski and Blake Johnson represented the seller, Metonic, in the transaction. The six-story brick and timber office building was built in 1937 and renovated in 2017. The sale also included 40 surface-level parking spaces.

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Interra Realty negotiated the $1.9M sale of 7027-33 South Indiana Ave., a recently renovated, 26-unit multifamily property in Park Manor. The price per unit was $73K. The confidential out-of-state buyer, who bought the property in a 1031 exchange, was represented by Interra Senior Managing Partner Brad Feldman. The 24K SF building is 97% occupied. Plans call for updating the remaining unrenovated units as they become vacant.

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Westport Properties has acquired its first two spaces in Chicagoland: an 885-unit self-storage facility at 1516 North Orleans St. and a 378-unit self-storage facility at 3510 Wilmette Ave. in northern suburban Wilmette, located close to Interstate 94 on Chicago’s North Shore. Westport will rebrand the properties under the US Storage Centers brand. It operates over 10M SF of rentable self-storage facilities. MJ Partners Self-Storage Group represented the seller in the transaction. 

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Jonathan Rose Cos. has acquired Englewood Gardens, a 13-building, 167-unit, family-designated scattered-site development. The Section 8 property is the 11th deal to close for the Rose Affordable Housing Preservation Fund V. The fund partnered with developers Deonna and Steve Thomas of 5T Management to buy the property for $10.7M. The acquisition was financed by assumed loans from Freddie Mac and the Chicago Department of Housing. 5T Management has taken over the property and will oversee a series of renovations. 

R2 Cos. has sold a $6.7M timber loft office building in Lincoln Park. The building at 2001 North Clybourn Ave. was purchased by a West Coast-based private investor for an undisclosed price. Greenstone Partners’ Danny Spitz and Jason St. John represented R2.

LEASES

Sigma Co.’s Bar-S signed a 48K SF lease at Prologis’ 130K SF warehouse and distribution facility at 2141 Internationale Parkway in southwest suburban Woodridge. The new location will serve as the company’s Midwest distribution center beginning Oct. 1. Bar-S will take up about 31% of the property and is leaving its current sublease at a LaGROU Distribution warehouse at 35th Street and Pulaski Road. Cresa’s Jay Cook represented Bar-S in the transaction.

FINANCING

Private equity firm ACRE has secured a $300M capital commitment from StepStone Group as part of a new strategic partnership. The commitment from StepStone is supported by a recapitalization of a 1,500-unit portfolio from ACRE’s previous funds — a primary fund investment and a joint venture focused on development opportunities in high-growth markets. The partnership will invest in multifamily opportunities across the risk spectrum, including value-add acquisitions and lease-up and ground-up development across the Midwest, Sun Belt and Texas.

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Merchants Capital has provided over $13M in financing to a joint venture between Gorman & Co. and the Gary Housing Authority for the rehabilitation of the Carolyn Mosby Apartments in Gary, Indiana. Originally built as public housing, the eight-story high-rise apartments at 650 Jackson St. include 142 units of one- and two-bedroom floor plans reserved for senior and/or disabled residents earning 30% to 60% of the area median income.

Merchants Capital New York facilitated the bond purchase in the form of a $13M Merchants Bank of Indiana construction loan. Once construction is completed, the loan will convert to a $5.2M permanent loan pursuant to a Freddie Mac Tax-Exempt Loan Forward Commitment to be serviced by Merchants Capital.