A massive apartment complex on Chicago’s South Side that has sold just once in its more than six-decade history is hitting the market in a deal that could attract bids of close to $200 million.
A group of investors including Chicago developers Farpoint Development and Golub & Co. hired JLL brokers to seek a sale of the 1,675-unit Prairie Shores complex on South Martin Luther King Drive near Lake Michigan, according to JLL marketing materials.
Bids could approach $200 million, according to someone familiar with the property, after the Chicago developers and equity partner Goldman Sachs Urban Investment Group poured about $40 million into a new clubhouse and other upgrades to the 20-acre complex, according to someone familiar with the property.
The investors bought the property, which includes five towers of 19 stories each, for almost $177 million, according to CoStar data. The sale was completed in November 2019, a few months before the onset of COVID-19.
Long-term effects of the pandemic and more recent factors such as rising interest rates and other economic worries have slowed the pace of property sales in Chicago and throughout the country.
Yet large deals are still happening, as demonstrated earlier this month when a venture of Spanish billionaire Amancio Ortega paid $231.5 million for a 492-unit apartment tower along the Kennedy Expressway at 727 W. Madison St. That is the largest apartment sale to date this year in Chicago.
JLL’s marketing materials describe Prairie Shores as an upside play, allowing investors to buy the complex and make upgrades to about three-quarters of the units. Renovations of the first one-fourth of the units by the current owners have led to rent increases of $250 per unit, or 20%, according to JLL.
The property, described as a workforce housing asset in the JLL materials, includes about 5 acres that could be developed later. Units range from studios to four bedrooms.
Prairie Shores was developed by Draper and Kramer from 1958 to 1961, and the Chicago firm continued to own it until selling it to the current owners. Draper and Kramer earlier this year sold the neighboring, 1,869-unit Lake Meadows complex to Antheus Capital for $161 million. Draper and Kramer also had owned that complex since building it in the 1950s.
Prairie Shores is hitting the market just months after Farpoint broke ground on the first infrastructure to support its planned $8 billion Bronzeville Lakefront mixed-use development alongside those big South Side high-rise complexes.
Golub declined to comment and Farpoint did not immediately respond to requests for comment from CoStar News.
A groundbreaking ceremony for the Bronzeville Lakefront megadevelopment was held at Prairie Shores, and Farpoint founding partner Scott Goodman became emotional. He recalled rodding sewers and fixing pipes at Prairie Shores growing up working for his father’s plumbing company, whose largest client was the big residential complex.
For the Record
JLL brokers Kevin Girard, Mark Stern and Zachary Kaufman are representing the sellers.