Atlas Says Student Housing Venture Worked

CHICAGO—New York-based Atlas Real Estate Partners and its partners Marc Realty Residential and Angelo Gordon recently finalized the sale of 777 South State, their 330-unit student-housing property in Chicago’s South Loop, to Bill O’Kane’s Group Fox. The partners got $85 million for the 882-bed property, significantly more than the $59 million they paid just two years ago. The big return has to be gratifying considering they endured some initial criticism.   

A 2013 story in Crain’s quoted Robert Bronstein, president of the Scion Group LLC, a Chicago-based student housing investor, who said the partners’ plan to market the tower as a summer housing option for interns or other employees showed they were underestimating “the marketing and turnover costs of what is essentially an extended-stay hotel.”