A California investor has paid $144 million for a 500-unit apartment tower in Chicago’s South Loop, completing the largest multifamily deal in the city of early 2024.
An affiliate of FPA Multifamily this month bought the 47-story luxury Paragon Chicago tower at 1326 S. Michigan Ave., according to Cook County property records.
The price equals $288,000 per unit for the luxury tower that Chicago real estate investor John Murphy developed with Los Angeles-based CIM Group.
It is the largest multifamily property sale of this year so far in the city, and the price is higher than all but three deals completed last year amid a slowdown in sales locally and nationally because of rising interest rates and other challenges. In the largest sale last year, Spanish billionaire and Zara founder Amancio Ortega paid $231.5 million for a 492-unit tower at 727 W. Madison St.
The South Loop sale price appears to be at a loss to the developers, who completed the high-rise in early 2019.
They hired Newmark brokers to seek a sale last summer.
The tower is almost 96% leased, with asking rents of $3.49 per square foot and $2,633 per unit, according to CoStar data.
The project cost $171 million to build, according to the Murphy Real Estate Services website. Murphy and CIM refinanced the tower with a $148 million loan from Deutsche Bank in 2019 after completing construction, according to property records. It’s unclear how much remained on the balance of that loan at the time of the sale.
FPA and Murphy did not immediately respond to requests for comment from CoStar News on Thursday. CIM Group confirmed the sale but did not comment further.
The new owner is now calling the tower Arrive Michigan Ave.
A combined $3.9 billion was invested in Chicago-area apartments last year, down from $5.7 billion in 2022, according to CoStar data. But the slowdown in Chicago and some other Great Lakes cities was less pronounced than the national slowdown, according to a recent CoStar analysis.
FPA also recently struck a deal with CIM Group in Los Angeles, paying $188 million for CIM’s 525-unit 888 at Grand Hope Park tower.
San Francisco-based FPA Multifamily also is a frequent investor in the Chicago area, including an affiliate’s $96 million purchase of a 558-unit complex in suburban Westmont, Illinois, last year.
For the Record
The sellers were represented by Newmark brokers Chuck Johanns, Liz Gagliardi and Susan Lawson.