Magellan Sells Lakeshore East Apartment Tower For $223M
Magellan Development, which is busy with Wanda Tower construction and plans for four more towers in Lakeshore East, just completed the biggest apartment tower trade of 2017, so far.
Magellan and its partner, JP Morgan Asset Management, agreed to sell Coast at Lakeshore East to Morguard North American Residential REIT in a $222.5M deal. Magellan put the 45-story, 515-unit building on the market in April 2016. Morguard is a late entrant in bidding for Coast; in March, Crain's Chicago Business reported that Crescent Heights signed a preliminary agreement to buy the asset.
The sale price is well below the $258M that analysts believed Magellan could have commanded for Coast, but rent growth in the downtown market has flatlined and a construction pipeline that will add nearly 12,000 new rentals by 2019 may have kept bids for the tower down.
CBRE's John Jaeger, Dan Cohen and MJ Zaring repped Magellan and JP Morgan. Morguard secured a $122.5M loan to facilitate the acquisition, arranged by Peter Marino and Molly Green with the CBRE Capital Markets Debt & Structured Finance team.
Downtown multifamily sales activity has been virtually silent this year after a record-shattering 2016, even as signs point to a seller's market forming.
