Chicago multifamily developer Draper and Kramer is looking to sell a 656-unit apartment tower in the South Loop that it has owned since completing it in 1967, in a deal that could get a boost from a very 2024 feature: a low-interest-rate loan that can be assumed by the buyer.
Draper and Kramer has hired CBRE brokers to sell Eleven Thirty, a 43-story tower at 1130 S. Michigan Ave., according to a brochure.
The tower near Grant Park comes with an option that has become popular after a series of interest-rate increases in recent years: a loan that the new buyer can assume.
In this case, it’s a loan from Allianz Life Insurance in 2017 that doesn’t mature until 2047. The loan has a remaining balance of almost $85.8 million, with a 3.7% interest rate well below recent levels, according to the CBRE brochure. It is an amortizing loan, with principal and interest payments of $463,061, according to CBRE.
Assumable debt could become less important over time if the Federal Reserve’s recent cut in baseline interest rates is followed by a series of similar moves.
Loan assumptions
The deal structure has been a factor in sales in Rogers Park and Logan Square in the city and in northwest suburban Hoffman Estates, among others.
It's not known how much Draper and Kramer is expecting in the South Loop sale. The firm declined to comment to CoStar News on Tuesday.
Eleven Thirty is more than 95% leased, with asking rents of $2,306 per unit and $3.03 per square foot, according to CoStar data. Retail tenants at the base of the tower include Yolk Restaurant, Lakeview Market and Hand & Stone Spa, according to the brochure.
Draper and Kramer previously listed Eleven Thirty for sale with a different brokerage in early 2023, but a deal never happened.
The firm is known for often holding on to investments for decades. Last year, Draper and Kramer sold its 1,869-unit Lake Meadows complex on the city’s South Side — which it developed in the 1950s — to Antheus Capital for $161 million.
Later that year, Draper and Kramer sold the newer-generation, 275-unit Aspire Residences in the South Loop to the same New Jersey-based firm for $59 million.
For the record
The seller is represented by CBRE brokers John Jaeger, Justin Puppi, Jason Zyck, Danny Zeboski and Pete Marino.