Crain's Chicago Business

Longtime Apartment Owner Sells More Than 300-Unit North Side Portfolio

April 05, 2024

The longtime owner of more than 300 apartments on the North Side has cashed in on a portfolio he started assembling in 1982.

Chicago investor David Gassman got a total of $72.4 million for his 17-building portfolio, which was divided up and sold to eight buyers in separate deals brokered by Essex Realty Group, according to the commercial real estate services firm. The deals ranged from the $23.5 million sale of a 125-unit portfolio in Rogers Park to smaller, several-million dollar transactions for four to eight units.

Though high interest rates have made it a tricky time to sell commercial property, Essex Principal Kate Varde said strong rental demand on the city’s North Side drew lots of investor interest in the properties, which included apartments in the Lakeview, Lincoln Park, Edgewater, Uptown, Ravenswood and Rogers Park neighborhoods.

“We had really strong interest in this portfolio,” Varde, who represented the seller, said. “You had high-quality properties in great locations, and I think the city has made it challenging to add new rental units. The rental market’s as full as I’ve seen it. Occupancies are high, and as a result investors have an appetite for well-located properties in Chicago.”

An apartment building boom in markets outside of Chicago, such as in the Sun Belt, has spilled over into oversupply, driving down rents and occupancy. Chicago’s apartment inventory has grown more slowly, expanding by 1% in 2023, below the national average of 2.3%, according to data from RealPage Market Analytics.

Affiliates of Chicago-based Slater Realty & Investment acquired the largest chunk of the portfolio, buying 127 apartments in Rogers Park, according to Cook County property records and the firm’s website. The company did not respond to a request for comment.

Other buyers included the firms Casey Capital, Highland Real Estate Partners, Aljack Investments and Fairmont Property Management, according to Essex.

For New York-based Highland Real Estate Partners, the sale was an opportunity to expand its presence in Lincoln Park with a six-unit apartment building “on one of the most sought after blocks in Chicago,” co-founder Benjamin Frazer said in a statement.

“Highland continues to see strength in the Lincoln Park/Lakeview submarkets given strong demand from renters and the limited new supply being delivered,” Frazer said.
Some of the deals, including Highland’s, allowed the buyers to assume existing debt on the properties, which can make it easier to finance deals amid high interest rates.

The portfolio sale included:
• 6954 N. Sheridan Road, 1145-1161 W. Lunt Ave., and 1224 W. Morse Ave.; $23.5 million
• 4424 N. Wolcott Ave., $7.5 million
• 1740-1752 W. North Shore Ave., $7 million
• 1900 W. Montrose Ave., $4.9 million
• 1040-1044 W. School St., $3.9 million
• 652 W. Roscoe St., $3.6 million
• 1738-1742 W. Touhy Ave., $3 million
• 4741 N. Beacon Ave., $3 million
• 2135 W. Ainslie St., $2.9 million
• 2548 N. Burling St., $2.8 million
• 4931 N. Claremont Ave., $2.5 million
• 6435-6455 N. Newgard Ave., $2.4 million
• 1421 W. Rosemont Ave., $2 million
• 3538 N. Fremont St., $1.9 million
• 4420 N. Winchester Ave., $1.4 million

Read Full Article at Crain's Chicago Business
Tagged in this post: Kate Varde