South Shore Apartments on Block in Chicago

Three high-rise apartment buildings in Chicago’s South Shore neighborhood have been put on the market for an aggregate list price of $50.8 million. All together, the buildings total 528 units. Last year was a record year for investment sales of apartment buildings in the Chicago market, but this year the trade in such properties is going to contract, perhaps by as much as 30 percent, predicts a recent report by CB Richard Ellis Inc. Total apartment sales in metro Chicago in 2007 were a record $2.47 billion; this year, CBRE notes that there will be roughly $1.8 billion in apartment sales in the market. Last year’s high total was buttressed by a number of very large deals, such as the sale of Presidential Towers for $475 million, but the decline in Chicago-area apartment transaction volume was already evident by the end of last year, mirroring national trends in the wake of the credit crunch. Fully 58 percent of Chicago apartment sales in 2007 came in the first half of the year, said the report. According to Marcus & Millichap Real Estate Investment Services, which is taking the three South Shore properties to market, they are more marketable because of their location in a gentrifying area near Lake Michigan, and because of various capital improvements made to the structures, such as remodeled units. At about $96,200 per unit if sold at list price, the buildings would also represent a lower cost to investors than the average per-unit sales price for apartments in Chicago, which was $274,370 last year, up from $148,191 in 2006, according to CBRE. The buildings include a 21-story high-rise apartment at 7345 South Shore Drive; a 34-story high-rise apartment at 7447 South Shore Drive; and a 13-story high-rise apartment at 7300 South Shore Drive. The South Shore neighborhood is about seven miles south of Downtown.