CHICAGO-Local investor brothers Harry and Charles Huzenis said they have raised $30 million through their JRG Capital Partners firm, based here, to invest up to $75 million in asset purchases. The company will buy up properties priced from $1 million to $10 million, with plans to hold the sites for future development, likely for multifamily uses.
Though the company has a history of developing condos, JRG and other Huzenis firms have owned a variety of urban infill assets in Chicago, including retail centers, net lease assets, parking lots and industrial buildings. Cheri Grossman, the company’s senior acquisitions officer, tells GlobeSt.com that JRG has letters of intent out now on 10 separate properties, though she says she can’t divulge the locations.
“We’re looking for properties that have some level of cash flow that can carry them while they are held,” Grossman says. “These could be parking lots or outdated buildings. We’ll spend some money to keep tenants in the property, but the ultimate goal is to consider a higher and better use five to seven years from now.”
The current hot property, of course, is apartment towers, and demand is expected to last. NAREIT just released a study claiming that there’s enough apartment demand across the country to last five more years. Grossman says, however, that the Huzenis brothers are going to be patient for the best time to develop. “We’ll be constantly evaluating, but we have investors that are onboard with the long-term hold,” she says. “It could be possible that we acquire in 2012 or 2013, and dispose of the assets by 2014 or 2015 if the demand is there. It could be as quick as 12 months, or as long as seven years.”
One example of the company’s style is the purchase of an $11 million loan on a former FedEx property at 1260 W. Madison in 2009. The 45,000-square-foot warehouse was slated to become a condo building, but the market dropped, and JRG leased the building to T-shirt company Threadless in late 2010, as the owners decided to let the property percolate for a little while longer.
Bob Flannery, COO of JRG, tells GlobeSt.com that he’s very bullish on Chicago, especially as the living-downtown population grows, spurred on by new college campus buildings. “We’ve seen some surveys that say that Chicago is the number one metro market for college students, as you have the exciting city life of a Manhattan for half the living cost, and about 70% of the salary.”
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
