Author: Alby Gallun, Crain's Chicago
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The developers of a 149-unit apartment project in the West Loop have put the property up for sale, betting that its proximity to Google's future Chicago offices and other technology companies will attract hefty bids from investors.
A joint venture including Northbrook-based Focus Development has hired CBRE to sell Circa922, a recently completed multifamily project at 922 W. Washington St. The property is close to the city's emerging technology sweet spot, four blocks from the Google project and about eight blocks west of Gogo, Uber Technologies and Twitter's new offices.
“There's going to be phenomenal growth in jobs (in that neighborhood), and that's going to drive demand for apartments,” said John Jaeger, executive vice president at CBRE. “We think the West Loop is an outperformer market.”
Focus executives declined to comment, referring a reporter to Jaeger.
Apartment prices in downtown Chicago have surged to new highs over the past couple of years, pushed higher by record rents, low interest rates and investors' voracious appetite for real estate.
Jaeger declined to say what he thought Circa922 would fetch. The most recent comparable transaction was the sale in November of K2, a 496-unit building in the Fulton River District, for $214.3 million, or $432,000 a unit.
Effective rents on per square foot basis are about the same in K2 and Circa922, according to report from Chicago-based consulting firm Appraisal Research Associates. But one person familiar with Circa922 said the property would sell for more than $500,000 a unit, or $75 million, citing its better location and larger apartments.
Circa922 is about 85 percent occupied, Jaeger said. Rents in the building range from $1,903 a month for a one-bedroom unit to $5,100 for a three-bedroom, according to a CBRE flyer.
Circa922 is actually two buildings: a vintage structure with 45 units originally developed as condos before the bust, and a brand new-104-unit building next door. In 2013, the joint venture between Focus, Washington D.C.-based Carlyle and Atlantic Realty Partners of Atlanta acquired the older structure and a parking lot next door, where it developed the new building.
Another Focus joint venture has proposed a 28-story apartment building at Halsted and Lake streets, about five blocks from Circa922.
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