Cresset Completes First Multifamily Acquisition
The Chicago firm wants to bring private investment opportunities in the multifamily market to its wealth management clients.
CHICAGO—Cresset Partners, the private investment affiliate of Cresset Wealth Advisors, recently acquired Wells Place, an 84-unit rental property in the heart of Chicago’s South Loop, located at 837 and 839 S. Wells St. This was the firm’s first real estate acquisition and the start of its plan to bring private investment opportunities in the multifamily market to its wealth management clients.
A host of luxury rental properties have sprouted up all around the city’s CBD, and institutional investors looking for stable cash flow have eagerly snapped up the giant residential towers. Cresset wants to get its investors a piece of this lucrative market, but on a smaller scale. And Wells Place provided the perfect opportunity.
“I believe it’s going to be well-occupied,” Mark Stern, managing director of real estate at Cresset Partners, tells GlobeSt.com, partly because “it’s different from everything in the pipeline.” The city will probably get another 5,000 rental units this year, but Wells Place provides its residents with condo-quality homes.
The market for condos collapsed during the Great Recession. And even though some Chicago developers have recently launched projects that will include a few condos, these are tentative first steps, and most builders remain leery.
But at Wells Place, the mix of one and two-bedroom units feature 10-foot ceilings, bamboo hardwood flooring, granite kitchen countertops, a private patio or balcony and one-to-one parking in an attached, heated garage. “We also look forward to converting the two ground-floor retail spaces into a fitness center for our residents,” Stern says.
Furthermore, it’s hard to beat the South Loop location. The downtown office market shows no signs of slowing down, and Wells Place is near several transportation hubs and within walking distance of the Loop.
“With growing demand for fee-efficient, direct investments with longer term investment horizons, Wells Place is a prime example of the types of opportunities we will be creating for our investors,” adds Eric Becker, Cresset co-founder. And the company has taken another step to boost investors’ confidence. “This property is also a great example of our commitment to invest alongside our clients in private opportunities.”
Cresset is now looking for its next multifamily property, which will probably be worth between $50 to $75 million, and within one of the nation’s major cities. “My inclination is our next deal will be outside Chicago,” says Stern, although that is not certain. However, “it was nice to have our first deal in our own backyard.”