CHICAGO—The competition to acquire healthy multifamily communities in the Chicago region can get intense, and not just for properties near downtown or on the North Shore. After attracting a lot of investor interest, Castle Lanterra Properties recently sold Midpointe Apartments, a 424-unit multifamily property at 4050 W. 115th St. on Chicago's southwestern corner, to a fund manager. Suffern, NY-based CLP purchased Midpointe in April 2014 for $28.5 million, and refinanced it three years later for $40 million. Company officials say the $49.5 million sale price should generate an internal rate of return of 36%.
“Generally, we are a much longer-term owner,” Elie Rieder, founder and chief executive officer of CLP, tells GlobeSt.com. “We would have been happy to hold onto this property. But there was very strong interest from many qualified buyers, both institutional investors and family offices.”
The quiet Mt. Greenwood neighborhood is a perfect location for such a community, Rieder adds. Almost all city employees are required by municipal ordinance to live within the city's boundaries, and the area attracts its fair share of those in the police and fire departments, as well as teachers. “This is a suburban-like setting but it also has the positives of living in the City of Chicago.”
CLP invested millions in upgrades to Midpointe, work that will continue under the new owner.
“Most of the heavy lifting was done,” Rieder says, but it remains a good value-add opportunity. CLP renovated 30% of the units, which received new flooring, stainless steel appliances, stone countertops, backsplashes, lighting, and fixtures.
It also created a new leasing office, resident lounge and fitness center from unutilized storage space. Other improvements included the installation of energy efficient roofs and LED lighting, new elevators, laundry rooms, parking lot resurfacing and restriping, and extensive landscaping throughout the property.
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
