Berkshire Residential Investments is looking to sell a River North apartment building even as high interest rates continue to hit real estate values across Chicago.
The Boston-based company, led by CEO David Olney, has hired CBRE to sell the 292-unit 8 O Five building at 805 North LaSalle Street, about Seven years after the property, Crain’s report.
Berkshire Hathaway, which bought the 32-story building in 2016 for $112.5 million, is now testing the market as rising interest rates are weighing on property values, making closing a nine-figure deal difficult. especially difficult. While the local multifamily market is relatively strong, crime rates and an overall gloomy outlook for Chicago real estate have sapped apartment values in the city as capital markets tighten. rent increase As of earlier this year, it has surpassed the national average.
Built in 2015, 8 O Five has an occupancy rate of just over 94 percent and an average rent of $2,564 per month, or $3.75 per square foot. CBRE sees the property as a value-add opportunity, noting that buyers could improve its amenities and raise rents. Potential upgrades include adding a yoga studio, expanding the fitness center or adding a fire pit and couches to the roof deck.
Another desirable aspect for potential buyers is the high income of the tenants. The building’s tenants, who are employed by family-owned businesses including Bank of America, Oracle and Amazon, make an average annual income of $128,885 and are 33 years old, according to a listing.
Other Chicago apartment buildings have recently traded for far less than what sellers originally invested in.nearest green city bought The 329-unit Lake & Wells building cost $98 million, compared with the $123 million it cost to develop the apartment complex 15 years ago.
Less than two weeks ago, Crescent Heights purchase A 400-unit apartment building in Streeterville is on the market for $173 million. That’s 28% less than the $240 million Invesco paid for the property in 2016.
— Quinn Donoghue
