Castle Lanterra Sells $50M Chicago Community
- Mar 01, 2018
Castle Lanterra Properties has disposed of Midpointe, a multifamily community in Chicago, for $49.5 million. The firm originally purchased the asset in 2014 from The Renatus Group for $28.5 million and refinanced it three years later for $40 million. The current sale price is expected to generate an IRR of 36 percent.
Located at 4050 West 115th St., the 424-unit property offers studio, one- and two-bedroom apartments ranging from 330 to 1,000 square feet. Comprising eight, four-story buildings, Midpointe was constructed in 1973 and currently has a 94.3 percent occupancy as of January 2018, according to Yardi Matrix.
“At the time of acquisition, we knew that this was going to be a challenging asset. Given its age, there were substantial deferred maintenance items that needed to be addressed, and elevated turnover and tenant arrears negatively impacted performance at the time,” Elie Rieder, CEO of Castle Lanterra Properties, told Multi-Housing News. “However, we felt the property had good intrinsic value—it was the only institutional quality asset in its submarket, and with the proper execution, there was considerable value-add upside to be realized. It is located in a high-barrier infill location and boasts excellent drive-by visibility.”
CLP invested millions in upgrades to the property which included building a new leasing office, resident lounge and fitness center from underutilized storage space; installing energy efficient roofs, LED lighting, elevators and laundry rooms; parking lot resurfacing and restriping; as well as extensive landscaping. The company also renovated 30 percent of the units to include new flooring, stone countertops, lighting, stainless steel appliances, backsplashes and fixtures.
“We rebranded the property shortly after acquisition to signal new ownership, and then began the task of improving operational practices and curing all of the physical deficiencies,” added Rieder to MHN. “Simultaneously, we undertook renovations to units as they naturally turned over. Nearly four years later, I’m proud to say that we were able to completely reposition the property—and more importantly, create a higher standard of living that residents can be proud of.”
Image courtesy of Castle Lanterra Properties