Origin Investments Acquires Chicago Property

The two-year-old West Loop community was 99 percent leased at the time of sale.
Monroe Aberdeen Place. Image courtesy of Origin Investments

Origin Investments has purchased an apartment building in the center of the swiftly-growing submarket immediately west of Chicago’s Loop central business district, in a transaction valued at $65.8 million. The seller and original developer was Michigan Avenue Real Estate Group and the property was 99 percent leased at sale.

Developed in 2018, the four-story, 120-unit Monroe Aberdeen Place features three one-bedroom, 92 two-bedroom and 25 three-bedroom apartments. Its residences provide features and finishes typically associated with condominiums. Apartments average 1,118 square feet in size and feature 10-foot-high ceilings, crown molding, full-depth stone countertops, in-unit full-size washers and dryers and in some units, private rooftop decks. Origin Investments will seek market-standard rents and parking fees.

Kiser Group, a Chicago-based multifamily brokerage firm, represented Origin Investments in the off-market transaction. Recently, Origin Investments announced plans to be part of a joint venture to develop a property in Chicago’s Pilsen enclave.

Tax increase expected

The greatest challenge of this transaction, not just for Origin, but likely for many investors contemplating acquisitions in Chicago, is the significant level of uncertainty associated with the property tax situation in the city and in Cook County,” Thomas Briney, director of Origin Investments, told Multi-Housing News.

Like any investor, we depend on a certain level of predictability, particularly when considering one of the largest expense items related to commercial real estate. Because properties in the city won’t be reassessed until 2021, which will determine tax bills in 2022, certainty is a valued commodity. We worked very closely with a property tax firm to project and model the best- and worst-case scenarios in terms of potential future tax liability.

This comprehensive modeling provided us with what we determined was a credible range of potential outcomes. This allowed us to be comfortable that even under the worst-case scenarios for property taxes our investment thesis was valid, and made Monroe Aberdeen worth pursuing. If the tax situation turns out better than we might expect, the returns to investors will be even better.”

Few Chicagoland submarkets are hotter than the West Loop. The area is steps away from Loop offices and West Loop employers like McDonald’s and Google. It features a wealth of transportation conveniences, as well as cutting-edge restaurants and nightlife.