11/09/2011

Luxury Chicago Apartment Tower on Block

Hoping to take advantage of the rebounding Chicago apartment market, a partnership is shopping a new luxury high-rise in the Central Loop.

The 389-unit tower, at 215 West Washington Street, has an extimated value of about $400,000/unit, or $155 million. HFF is advising the seller, a partnership between Jupiter Realty of Chicago and Cornerstone Real Estate of Hartford.

The 50-story building, which was completed last year, is still in its initial lease-up phase. The occupancy rate is about 85%.

The units, which range from studios to three-bedroom apartments, have stainless steel appliances, cherry cabinets and granite countertops. Some have balconies. Amenities include a fitness center, a steam room and a library. There is an attached 12-story garage. The offering doesn’t include about 14,000 square feet of retail space on the street level.

Chicago’s rental market has bounced back strongly from the economic downturn. Market-wide occupancy has climbed to 95% from 93% in 2009, according to Marcus & Millichap, and newer luxury properties are commanding boom-year capitalization rates.

In May, Hartz Mountain Industries of Secaucus, N.J., acquired the 809-unit building at One West Superior Place from Toronto-based Brookfield Asset Management for $320 million, or $396,000/unit. The capitalization rate was reportedly 4.4%. And MetLife is under contract to buy the 249-unit EnV tower at 161 West Kinzie Street from Lynd Development of San Antonio for about $520,000/unit, or $130 million — the highest per-unit price ever in Chicago. CBRE is the broker.

Meanwhile, a Pacific Life partnership is taking best-and-final offers on two high-rise apartment properties with 1,198 total units in the master-planned K Station development in the West Loop. Alta at K Station, with towers of 41 and 39 stories at 555 West Kinzie Street, and the 39-story Echelon at K Station, at 353 North Desplaines Street, could command $396,000/unit, or $475 million in total. The partnership’s broker, CBRE, is accepting bids on either tower or both.

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