Draper And Kramer's Purchase Of River North Tower Continues Its Transformation
Chicago’s market for multifamily properties softened throughout much of 2019, but the end of the year brought a number of significant sales.
The last big transaction under the wire may have been Draper and Kramer’s acquisition of HUBBARD221, a luxury apartment tower in River North developed by Centrum Partners and Hubbard Street Group. Draper and Kramer purchased the 195-unit building through a 1031 exchange after the $177M sale in November of its Prairie Shores, a 1,675-unit community in the South Side’s Bronzeville neighborhood, to Farpoint Development and Golub & Co.
“As a company with a long and successful track record of owning and operating in Chicago, we remain bullish on the local multifamily market and its ability to deliver attractive risk-adjusted returns in the months and years ahead,” Draper and Kramer Chief Investment Officer Blas Puzon said.
Sales volume had declined 19% in the 12 months leading up the end of Q3, according to Marcus & Millichap’s latest multifamily market report. The firm said concerns over rising property taxes and a measure of economic uncertainty slowed transaction velocity. Still, the overall outlook remains positive.
“Exceptional absorption will keep developers in Chicago focusing on areas near major employment hubs, particularly in the urban core and some northwestern suburbs,” according to the report.
Completed in 1961, Prairie Shores was far and away Draper and Kramer’s best-known property. Going forward, it may be better known for owning and developing large luxury apartment communities across much of the downtown core. It recently topped off its 24-story Aspire Residences, a transit-oriented development at 2111 South Wabash in the vibrant South Loop district. In the summer, the company celebrated the opening of 61 Banks St., a 58-unit boutique rental in the Gold Coast neighborhood.
“In terms of what constitutes a core investment under Draper and Kramer’s current acquisition strategy, HUBBARD221 checked all the boxes,” Puzon said. “It’s a high-quality asset that will stand the test of time thanks to its ability to deliver the live-work-play lifestyle that so many renters seek.”
HUBBARD221, completed in 2017, includes a full set of tenant amenities, including a large rooftop terrace, a fire pit, cabanas and a pool. Draper and Kramer will also manage the property, growing its portfolio to more than 8,000 units in Chicago, St. Louis, Dallas and San Antonio.