USAA Real Estate JV Grabs 280-Unit Multi-Family Tower in Chicago
- Aug 05, 2014
USAA Real Estate Co. recently joined forces with Golub & Co. to acquire Chestnut Place, a 280-unit apartment building towering over the streets Chicago. The partners are keeping mum on the sale price, but the Cook County Recorder of Deeds isn’t; the partners paid $80.5 million for the 30-story property.
USAA and Golub purchased Chestnut Place from Chestnut Place Associates, and the partners had good reason—well, three good reasons—for pursuing the asset: location, location, location. Simply put, David Reahl, executive director with USAA, told Commercial Property Executive, “Chestnut Place is in an A+ location in the Gold Coast submarket.” The Gold Coast is one of the most highly coveted residential and commercial areas in the Windy City and Chestnut Place, with an address of 850 N. State St., sits squarely in the neighborhood.
However, it is more than a premier location that would attract any investor to Chestnut Place, which was marketed by commercial real estate services firm CBRE Group on behalf of the seller. The 34-year-old multi-family property also features 6,500 square feet of ground level retail, a 196-space parking garage and, perhaps most appealing, a 97 percent occupancy level. Demand for apartments in Chicago is strong, prompted by, Reahl adds, “job migration from suburbs to city, later household formation and the urban lifestyle of live, work, play.”
And there will be more to love at Chestnut Place, as USAA and Golub plan to upgrade the building with renovations of the retail space, updates of residential amenities and improvements to the apartment units, corridors and lobby area.
The real estate community can expect more acquisition news from USAA this year, be it in the multi-family market or other commercial sectors. “[We’re interested in] the largest 15 markets in country; gateway markets, where population growth and job growth are expected over the next few years,” Reahl added.
And certainly Chicago will continue to be on USAA’s list—and that of other buyers. Recent investment activity in the city includes ASB Real Estate Investments’ $60 million purchase of the 55,000-square-foot retail asset at 10 S. State St. ASB announced yesterday that hit had acquired the three-level property, located in Chicago’s historic Loop neighborhood, from the Irish Bank Resolution Corp. And in July, Israel’s Clal Insurance snapped up the 225,000-square-foot Harper Court mixed-use office and retail complex in Hyde Park for $112 million and, in what has been deemed the largest single-building office transaction in Chicago history, the Irvine Co. bought the 1.3 million-square-foot office tower at 300 N. LaSalle from KBS REIT II for $850 million.