(To read more on the multifamily market, click here.)
GLENVIEW, IL-A private investment group has purchased the 112-unit Valley Lo Towers II apartment complex, at 1900 Chestnut Ave. in Glenview, IL for $26.13 million. The sale price was above the asking price of $26 million and represents a price of $233,304 per unit or $198.47 per sf, says Scott Harris, a senior investment associate and a director of the national multi-housing group for Marcus & Millichap Real Estate Investment Brokerage Co. The cap rate on the sale was 5.38%.
Harris and David Tarnoff, a director with the national multi-housing group, represented both the buyer and the seller. Neither the buyer nor the seller was disclosed. The owners received "about a dozen offers on the property," Harris tells GlobeSt.com. "Out of those 12 offers, we had four buyers that were above our asking price of $26 million and at least one of those buyers planned on holding the property long-term as apartments," he says.
The apartment complex is currently 97% occupied. The building was constructed in 1988 on 7.2 acres next to a nature preserve. The owners had spent nearly $1 million on improvements to the property since 2005. "The property was in pristine condition," Harris says. Major renovations are not planned for the present but, if the building is converted to condos, there would be renovations done to the kitchens and "a fair amount of unit improvements," he says.
The private investment group purchased the apartment complex because of the location and because the property will be a good investment. "I think the buyers felt that they would be able to raise rents as time progresses over the next year or so," he says. The property must remain rental housing until 2009 because of bonds issued by the Village of Glenview.
The apartment complex will likely be converted to condos in 2009. "That may depend on exactly what the market looks like at that point. It is not a 100% conclusion that they would do a condo conversion right away," Harris says. However, it is likely the building would be converted to condominiums at some point. Condos sell at more than $300 per sf, considerably higher than the per sf price the building was purchased for, he says. "Long-term, [condominiums] are certainly the highest and best use," he says.
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