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MUNDELEIN, IL-BPG Properties Ltd., based in Philadelphia, has purchased the Park Butterfield Apartments at 2200 S. Butterfield Rd. BPG purchased the 522-unit complex for $60 million for BPG's affiliate Madison Apartment Group LP, says Joseph Mullen, president and chief executive officer of the partnership. The cap rate is estimated at 6.25%, Mullen tells GlobeSt.com.
The seller was reportedly Laramar Group. Mullen said he could not disclose the seller except to say that it was a Chicago-based private real estate investment company. Mullen did confirm that Laramar Group had been managing the apartment complex.
BPG purchased the property because they want to continue to grow their presence in the Midwest, Mullen says. BPG currently owns two properties in St. Louis and owns a high rise at 2 E. 8th St. in Downtown Chicago. Additionally, "It is in a great location with strong demographics," he says. The area "has a high income, a lot of employment and a lot of retail." Madison will now manage the 18 three-story buildings that have a mixture of studio, one-bedroom and two-bedroom units with an average apartment size of 940 sf.
The complex was constructed in 1974 and underwent extensive renovations when it was purchased in 2003 by the previous owner. Renovations included new roofs, windows, major building systems and clubhouse. Additionally, the unit interiors were updated. The previous owner spent approximately $30,000 per unit on the renovations, Mullen says.
Madison plans to spend an estimated $2.4 million for further renovations such as adding washers and dryers to the majority of the units, painting the exterior and landscaping upgrades. Madison hopes to increase rents once renovations are complete. Rents currently range from an average of $825 for a 520-sf studio apartment to $1,191 for a 1,088-sf two-bedroom apartment, according to materials from Chicago-based Moran & Co., which marketed the property.
BPG does not have a strict plan on how long they will hold the property, Mullen says. "Each year, a sell or hold analysis is done on each of the properties we own," he says. With the purchase, Madison's holdings are close to 25,000 units in 22 states, Mullen says.
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