A 280-unit apartment tower in Chicago’s Gold Coast has sold for more than $85 million in a deal between California investors that priced the property well below its value when it last sold seven years ago.
San Francisco-based Farallon Capital Management last week bought the 30-story Chestnut Place tower at 8 W. Chestnut St., according to online property records. The seller was Los Angeles-based CIM Group.
The price was $85.2 million, a big drop from the $108 million that CIM paid in December 2017.
CIM's Chicago-based partner, Golub & Co., will remain an investor with the new owner as part of the recapitalization.
“Chestnut Place stands as an important asset in Golub & Company’s portfolio, and its recent sale and recapitalization underscore our ongoing commitment to both the neighborhood and the Chicago market,” the firm said in a statement emailed to CoStar News. “We are pleased to keep this property within Golub’s ownership and for the exciting new chapter with our partner.”
Farallon and CIM declined to comment.
It is the latest example of multifamily properties locally and nationally selling for less than previous valuations after hurdles such as increased borrowing costs and a pause by many large investors. Hope has been rising in recent weeks that the Federal Reserve’s first in an expected series of rate cuts could boost transaction volume and push up prices.
Highlighting the strained market, the owners of a 185-unit Gold Coast tower at 2 W. Delaware Place last month surrendered the property to the lender via a deed in lieu of foreclosure.
Built in 1980, Chestnut Place is more than 96% leased, according to CoStar data. Asking rents are $2,619 per unit and $3.41 per square foot.
The sale price was higher than the value of a $75.8 million loan that CIM and Golub took out from Greystar to refinance the property in March 2023, according to Cook County property records.
CIM and Golub have partnered on several Chicago investments, including the conversion of historic Tribune Tower into residential condominiums and reconfigured retail space on the Magnificent Mile.
South of there, CIM Group earlier felt the pain of reduced values when it sold a 500-unit apartment tower in the South Loop for $144 million to another San Francisco-based buyer, FPA Multifamily, for less than it cost to build. CIM’s partner on that project was Chicago developer John Murphy.
For the record
The seller was represented by CBRE brokers John Jaeger, Justin Puppi and Jason Zyck.