CHICAGO—Golub & Co. and its partner Alcion Ventures have just acquired One East Delaware, a luxury rental community in Chicago's Gold Coast neighborhood, from Waterton. The partners plan to reposition and upgrade the 306-unit building and say that, although plans remain fluid, they could eventually push the rental rates up by between 10% and 20%. The price was not disclosed, but Crain's reported it was around $145 million.
The seller was represented by HFF. HFF also arranged financing for the deal through Deutsche Bank on behalf of the new owners.
The acquisition reflects the tremendous confidence that Golub officials have in the city's multifamily market, especially in the neighborhoods adjacent to the CBD. In addition to recently purchasing several significant residential assets, such as the 30-story Chestnut Place at 850 N. State in 2014, Golub has also launched the development of several new buildings. Earlier this month, for example, along with Los Angeles-based CIM Group, it opened a new 40-story residential tower at 1001 S. State St. in the South Loop neighborhood.
“The multifamily market has been quite strong for the past few years now, and we believe that is going to continue,” Michael Newman, chief executive officer of Chicago-based Golub, tells GlobeSt.com. “I think we will see some tapering off because of the new supply,” but for well-located buildings such as 1 E. Delaware, “demand will remain strong. We'll get our fair share.”
Newman says that he can't be very specific about the upcoming renovation because it is still in the planning stages, but Golub will refresh and upgrade both the amenities and the units. The building's lobby seems a bit dated, and it could use a makeover, along with other common areas such as the fitness center. The company will also look into adding a resident lounge, among other features, and the units may receive new flooring, lighting, cabinets, countertops and technology.
Most, but not all, of the recent deals in the multifamily market are not overleveraged and have very solid equity partners, Newman adds. Furthermore, considering the robust job growth downtown and the unquenched desire among many people to live close to downtown, the overall fundamentals should boost confidence. The expected delivery of thousands of new units in the next couple of years “could soften things, but time will tell.”
Steady gains in the US economy have resulted in net positives for the multifamily sector—will this wave continue for the foreseeable future? What's driving development and capital flows? Join us at RealShare Apartments on October 19 & 20 for impactful information from the leaders in the National multifamily space. Learn more.
CHICAGO—Golub & Co. and its partner Alcion Ventures have just acquired One East Delaware, a luxury rental community in Chicago's Gold Coast neighborhood, from Waterton. The partners plan to reposition and upgrade the 306-unit building and say that, although plans remain fluid, they could eventually push the rental rates up by between 10% and 20%. The price was not disclosed, but Crain's reported it was around $145 million.
The seller was represented by HFF. HFF also arranged financing for the deal through
The acquisition reflects the tremendous confidence that Golub officials have in the city's multifamily market, especially in the neighborhoods adjacent to the CBD. In addition to recently purchasing several significant residential assets, such as the 30-story Chestnut Place at 850 N. State in 2014, Golub has also launched the development of several new buildings. Earlier this month, for example, along with Los Angeles-based CIM Group, it opened a new 40-story residential tower at 1001 S. State St. in the South Loop neighborhood.
“The multifamily market has been quite strong for the past few years now, and we believe that is going to continue,”
Newman says that he can't be very specific about the upcoming renovation because it is still in the planning stages, but Golub will refresh and upgrade both the amenities and the units. The building's lobby seems a bit dated, and it could use a makeover, along with other common areas such as the fitness center. The company will also look into adding a resident lounge, among other features, and the units may receive new flooring, lighting, cabinets, countertops and technology.
Most, but not all, of the recent deals in the multifamily market are not overleveraged and have very solid equity partners, Newman adds. Furthermore, considering the robust job growth downtown and the unquenched desire among many people to live close to downtown, the overall fundamentals should boost confidence. The expected delivery of thousands of new units in the next couple of years “could soften things, but time will tell.”
Steady gains in the US economy have resulted in net positives for the multifamily sector—will this wave continue for the foreseeable future? What's driving development and capital flows? Join us at RealShare Apartments on October 19 & 20 for impactful information from the leaders in the National multifamily space. Learn more.
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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.
