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FPA Multifamily buys McClurg Court Center apartments in Streeterville – Crain’s Chicago Business

A San Francisco investment firm has acquired McClurg Court Center, a 1,061-unit apartment complex in Streeterville, the biggest local multifamily deal of the year in a quickly recovering downtown Chicago market.

FPA Multifamily completed its acquisition Friday of the two-tower property at 333 E. Ontario St. from the Multi-Employer Property Trust, a real estate fund, according to a LinkedIn posting by an executive at FPA affiliate Redwood Construction.

It’s unclear what FPA paid for McClurg Court, the second-biggest apartment property in downtown Chicago. The property was expected to fetch more than $200 million when it hit the market in February, but people familiar with the sale said the price fell well short of that target. The Redwood executive, David Foos, and FPA representatives did not respond to requests to comment. A spokesman for BentallGreenOak, a Toronto-based investment adviser that manages the MEPT fund, confirmed the sale but declined to disclose a price.

Still, no apartment sale in the city or suburbs so far this year comes close to the size of McClurg Court deal. The downtown apartment investment market went into hibernation during the COVID-19 pandemic, as rents and occupancies plunged. Facing an uncertain future, investors pulled way back, wary of overpaying in a market with so many unknowns. Most landlords saw no reason to sell during such a severe downturn. The few that tried wound up taking their properties off the market in the end.

But the volume of deals could pick up in the second half of the year amid a remarkable turnaround in downtown occupancies and rents. Several big buildings, including the Bernardin in River North, the Shoreham, the Tides in Lakeshore East and 1407 on Michigan in the South Loop, have gone up for sale in recent months, another sign of optimism among landlords.

“There’s a lot more certainty in the market right now about where rents are going to be headed,” said Ron DeVries, senior managing director in the Chicago office of Integra Realty Resources, an appraisal and consulting firm. “The path is getting pretty clear.”

The sale of McClurg Court ranks among the biggest Chicago-area apartment deals over the past two years, joining a group that includes Marquee at Block 37 in the Loop, which sold for $265 million in December 2019; Essex on the Park, a tower next to Grant Park that fetched about $190 million last October; and Prairie Shores, a housing complex on the near South Side that sold for $168 million in November 2019.

The MEPT has owned McClurg Court since 2006, when it paid $126 million for the property. BentallGreenOak has spent about $35 million over the past five years on improvements to McClurg Court, including its mechanical systems and amenities, according to Real Estate Alert, a trade publication.

 

Chicago is familiar turf for FPA, which has acquired multiple properties here in recent years, including the Lex and Terrazio in the South Loop and ReNew on York in Bensenville. FPA has already changed McClurg Court’s name to Arrive Streeterville, using branding it has applied to other FPA properties, including the Lex and Terrazio.

Built in 1972, McClurg Court is considered a Class B property in a downtown dominated by newer and fancier high-rises. Its average apartment rents for $2,006 per month, or $2.70 per square foot, according to CoStar Group, a real estate data provider.

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