Real estate giant Brookfield is looking to sell a massive apartment complex near Chicago’s O’Hare International Airport in an offering that could continue a recent run of high-priced multifamily sales in the city.
A real estate affiliate of Toronto-based Brookfield has hired Newmark brokers to sell the five-building, 1,115-unit Pavilion Apartments complex on River Road, according to marketing materials from the brokerage.
The far Northwest Side complex is available following some high-priced sales closer to the city center, including Crescent Heights paying just over $173 million for the residential portion of the 50-story tower at 340 E. North Water St. in Streeterville and Spanish billionaire Amancio Ortega paying $231.5 million for the 44-story, 492-unit tower at 727 W. Madison St. along the Kennedy Expressway.
There is potential for a far larger deal after Crescent Heights in recent days put the 76-story, 800-unit NEMA Chicago skyscraper along Grant Park on the market.
Those are all newer luxury projects with far higher rents than the Pavilion Apartments.
Overall sales volume is down this year with rising interest rates and other economic factors dampening interest from investors and lenders. There has been a combined $3 billion invested in Chicago-area multifamily properties so far this year, on pace to fall well short of last year’s $5.7 billion and $5.4 billion in 2021, according to CoStar data.
It’s not clear how much Brookfield is expecting in a sale, and the firm did not respond to a request for comment from CoStar News. Crain’s Chicago Business, which previously reported Brookfield’s plans to sell the complex, estimated it could sell for close to $150 million.
The property was appraised at $186.2 million in December 2017, according to CoStar data on the commercial mortgage-backed securities loan. That was just before Forest City Realty Trust refinanced the complex with a more than $92.7 million CMBS loan.
Brookfield acquired the property and its loan as part of its 2018 acquisition of Forest City Realty Trust. The loan with a 4.05% interest rate matures in March 2028.
Along with 15-story residential towers, the complex includes an indoor and outdoor pool, tennis and racquetball courts and a multilevel, recently renovated fitness center, according to Newmark.
The Pavilion property is 97% leased at an average of $1,573 per unit, according to the materials.
Built in the late 1960s and early 1970s, the property is near interstates 90 and 294, along suburban Rosemont, Illinois.
Until earlier this year, 223 units were switched from affordable rents to market rate after a 30-year federal low-income tax credits deal expired, Block Club Chicago reported in April.
For the Record
Newmark brokers Elizabeth Gagliardi, Chuck Johanns, Susan Lawson, Joe Raucci and Bishop Polizzotto are representing the seller.