While private players are increasing their acquisition appetites, many REITs and institutions have been streamlining their operations by selling off assets throughout Chicago. For instance, Equity Residential, Prudential, BlackRock, and Archstone-Smith all disposed of assets in Chicago last year. Many of these institutional sellers currently view this as an opportune time to sell apartment assets in Chicago.
CLEAR FORECAST As operating fundamentals improve in 2007, prices for apartment properties will continue to rise in Chicago. While Class A product will be in demand among private investors and some institutional investors, converters will make up a smaller percentage of the buyer pool this year compared with 2006. Conversion demand won’t evaporate altogether, but price points will be such that buyers can achieve positive returns as either operators or converters.
Linwood C. Thompson is a senior vice president and managing director of M&M’s National Multi Housing Group.
MFE DOZEN: Asheville, N.C. (January) Southern charm wins big
Chicago (February) Good news for the Windy City
Atlanta (March) Peachy deals crop up
Washington, D.C. (April) Capital efforts pay off
Denver (May) Multifamily goes mile-high
San Jose (June) Golden opportunities abound
Minneapolis (July) New constructions in the Twin Cities
New Orleans (August) The Big Easy rebuilds
Providence (September) Promising developments in the Northeast
Dallas (October) Herding up new projects
Indianapolis (November) The heartland keeps ticking
Manhattan (December) The market that never sleeps
FAST FACTS Considering Chicago?
Here’s what you need to know:
NOTABLE: Chicago offers 31 miles of lakefront shores. The world’s first steel-framed skyscraper—the 10-story Home Insurance Building—was built here in 1885. The city still hosts the country’s tallest building, the Sears Tower. The first All-Star baseball game was played here in 1933. Known for its wide streets and boulevards, the city’s architectural plan was dubbed “Paris in the Prairie.”