Clothing retailer Zara’s billionaire founder has pulled off the highest-price multifamily purchase of the year in Chicago, paying more than $231 million for a 492-unit tower along the Kennedy Expressway.
Pontegadea, a real estate investment firm of Spanish billionaire Amancio Ortega, bought the 44-story tower at 727 W. Madison St. this month, according to Cook County property records.
The price of $231.5 million, or $470,528 per unit, is the highest value apartment property sale to date in the city in 2023, based on CoStar data.
Ortega’s Pontegadea, which has an office in Miami, topped a recent $173 million deal by Miami-based Crescent Heights for the residential portion of the 50-story tower at 340 E. North Water St. in Chicago’s Streeterville neighborhood.
Pontegadea’s deal stands out in a slow year for major deals in Chicago and many other cities. It also adds to Ortega’s billions of dollars in real estate investments throughout the globe, including previous high-profile deals in Chicago.
Ortega is the largest shareholder in Zara’s parent company, Inditex.
Previous Sale Attempt
Sellers of the 496-foot-tall tower at 727 W. Madison were Skokie, Illinois-based developer F&F Realty and a real estate affiliate of Los Angeles-based Ares Management. They previously tried to sell the tower in the early months of the pandemic before refinancing it with a $177 million loan from Germany’s Bayerische Landesbank in May 2022, according to county property records.
Other large apartment deals in Chicago this year have included Antheus Capital’s $161 million purchase of the Lake Meadows complex on the South Side and Avanath Capital’s $119 million deal for the 256-unit Lincoln Park Plaza tower.
A combined $2.2 billion has been invested in Chicago-area multifamily property sales so far this year, far behind last year’s $5.6 billion full-year total, according to CoStar data.
Deals of several types of commercial properties have slowed since last spring because of rising interest rates and other economic factors. It has been more than a year since a downtown Chicago office building sold.
Pontegadea’s deal for 727 W. Madison was first reported by The Real Deal Chicago. The tower is along Greektown and the fast-growing Fulton Market district.
Ares declined to comment to CoStar News. F&F Realty and Pontegadea did not immediately respond to CoStar's requests for comment.
Other Purchases
Completed in 2019, the Madison Street tower is 6.7% vacant, with asking rents of $3,386 per unit and $4.31 per square foot, according to CoStar data.
Ortega’s real estate investment firm previously has bought well-known Chicago properties.
They include retail at 730-750 N. Michigan Ave., retail in the former Esquire Theatre building at 58-104 E. Oak St. and the 216-room former Dana Hotel in River North, which it renamed Eurostars Magnificent Mile.
Pontegadea also has set Seattle records with a $740 million deal for two office towers leased to Amazon in 2019 and a nearly $323 million purchase of a 461-unit apartment tower late last year.
In early 2022, the firm paid $1.2 billion Canadian dollars for the Royal Bank Plaza office complex in Toronto’s financial district.
In the firm’s first U.S. logistics portfolio deal, Pontegadea last year paid $900 million for seven industrial properties in the Sun Belt and the Northeast.
For the Record
The sellers were represented by Eastdil Secured.