Origin Investments has completed the acquisition of Monroe Aberdeen Place, a 120-unit apartment building in the Chicago’s expanding and evolving West Loop submarket. The seller and original developer of the property was Michigan Avenue Real Estate Group. The transaction, made on behalf of Origin’s IncomePlus Fund, was valued at $65.8 million.
Chicago-based multifamily brokerage firm Kiser Group represented Origin Investments in the off-market transaction. At the time of acquisition, the property was 99 percent leased. The unit mix, 97 percent two and three-bedroom apartments, features 25 three-bedroom, 92 two bedroom and 3 one-bedroom units.
Monroe Aberdeen Place was developed in 2018 with condo-like standards and finishes. The units, which average 1,118 square feet, feature include 10-foot ceiling heights, crown molding throughout, full depth stone countertops and full size washer/dryers. Some units also feature private rooftop decks. Monroe Aberdeen Place also offers an above-market one parking space per unit, which provides relief from Chicago’s extreme weather conditions.
“Monroe Aberdeen came online only two years ago and while it is a stabilized asset, there continues to be great opportunity to maximize net operating income and the value of the property at this popular, high-quality asset,” said Thomas Briney, director, Origin Investments.
Among other things, Origin will implement market standard rents and parking fees, and providing quality hands-on management to create additional value and enhance the tenant experience.
One of the significant factors influencing the Aberdeen Place transaction is the uncertainty that exists for commercial and rental properties in the city of Chicago and Cook County. A hefty property tax increase is anticipated. That expectation had an impact on the asking price for the property. A careful and thorough evaluation and projection of the property tax situation allowed Origin to be very comfortable with the returns that can be produced under both the best- and worst-case scenarios.
“The property tax situation in Chicago and throughout Cook County continues to give investors great pause,” said Briney. “Yet as we evaluated all aspects of this acquisition—the location, quality of construction and unique value creation opportunity—and got comfortable with the best- and worst-case property tax scenarios, we moved aggressively forward to close this transaction.”
“This was an opportune and appropriate time for Michigan Avenue Real Estate Group to maximize the value of their development investment,” said Michael D’Agostino, senior director at Kiser Group. “The quality product, world-class location and high stable cashflow were appealing to Origin Investments, and those factors outweighed the tax uncertainty.”