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Multifamily Investment on the Cutting Edge

Chicago Multifamily

Everyone writes about trickle-down economics and fashion trends, but we’re going to tackle the latest phenomenon—trickle-down multifamily investment—at a special summit on April 8. (Trickle-down multifamily is not, thankfully, a leak in your ceiling.)


Renters may be migrating downtown, but value-add investors are moving out to the borderline neighborhoods thanks to diminishing returns in the hottest ‘hoods (Old Town, Lincoln Park, Lakeview, etc.), Windy City RE principal Josh Rubenstein (a panelist at the event) tells us. The buildings tend to be smaller (three to 20 units), and Windy City RE (with 1,000 units across 80 buildings) is focusing on rehabs in areas like Pilsen, the South Loop, and just north of Logan Square along Milwaukee and the Blue Line. They’ve also picked up 400 to 500 units in the ‘burbs, where they’ll turn around bigger properties and sell them to larger investors or small REITs, he says. (Some would call the suburbs risky, but Josh says larger buildings’ economies of scale add a safety net.)


The firm generally holds properties for a year or two (making it long-term capital gains for their investors), Josh tells us. In the South Loop, he’s working on a redevelopment (above, valued at $12M when completed) on Cullerton between State and Wabash, building 25 apartments and 20k SF of retail in a property that’s been vacant for 60 years. Windy City RE is taking on more adaptive-reuse projects because of their higher returns. “All the easy facelifts happen first. Then redevelopment, new construction, and the market tanks,” Josh jokes. (That's exactly how Liza Minnelli handles her plastic surgery.) The company does not do new construction, but they’re on the hunt for old warehouses to convert and other distressed deals, he says. Outside of work, Josh is excited to race sailboats when the weather warms up.