November 26, 2022

The Seneca apartment building at 200 E. Chestnut St. is for sale.

A trio of big downtown multifamily buildings has hit the market, testing the enthusiasm of investors for Chicago apartments amid growing uncertainty about the future.
Brokers for Newmark are courting buyers for Next, a 310-unit tower on the Near North Side; the Seneca, a 286-unit vintage building in Streeterville, and Emme, a 199-unit property in the West Loop, according to marketing brochures for the properties. Emme, which opened in 2017, is the newest of the three buildings and the Seneca, built in 1924, is the oldest.
With downtown rents at all-time highs, it should be a great time to sell an apartment building. But rising interest rates and turbulent financial markets could limit the number of investors that bid on the properties—and what they’re willing to pay.
Chicago has some baggage of its own: Many real estate investors are eschewing the city, worried that rising assessments will result in big property tax hikes, say brokers and landlords.
Just three downtown multifamily buildings have sold for more than $100 million this year. In the most recent big deal, Morguard, a Canadian investor, paid $133 million for Echelon Chicago, a 350-unit building in the Fulton River District. But several big properties are on the market, including 3Eleven, a 245-unit building in River North; Spoke, a 363-unit building in River West; Paragon, a 500-unit tower in the South Loop, and Xavier, a 240-unit property on the Near North Side.
Green Cities, a Portland, Ore.-based investor, put Xavier up for sale a few months ago. Now, the firm—formerly known as Gerding Edlen—has decided to sell another of its Chicago assets, Emme.
“It’s a great building, and the asset’s performed really well,” with strong rent growth, said Green Cities Managing Partner Kelly Saito.
Yet he acknowledges that broader economic forces don’t help landlords trying to sell buildings right now.
“There are a lot of variables at play,” Saito said. “You have a lot of uncertainty around the economy and interest rates.”
He declined to say how much he expected a buyer to pay for Emme, a 14-story building at 165 N. Des Plaines St. Newmark is marketing all three buildings without asking prices. A Newmark executive did not respond to a request for comment.
The brokerage is selling Next, at 347 W. Chestnut St., for Fifield, the Chicago-based developer that completed the 28-story tower in 2016. A Fifield executive did not immediately respond to a request for comment.
Vanbarton Group, a New York-based real estate investor, has hired Newmark to sell the Seneca, a 17-story building at 200 E. Chestnut St. Vanbarton paid $74.9 million for the property in December 2014. A Vanbarton executive did not return a call.
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