Dive Brief:
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Glendale, CA-based investment firm American Realty Advisors has said it will buy a 216-unit apartment building in Chicago’s up-and-coming Fulton Market District for an undisclosed sum, according to Crain’s Chicago Business.
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Built in 2014, Madison at Racine is a nine-story building developed by Ascend Real Estate Group, in Chicago, and Intercontinental Real Estate, in Boston. The building was more than 90% occupied as of the fourth quarter, with the typical unit renting for $3.03 per square foot — a 4% increase from a year ago.
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The deal has not been finalized. American Realty Advisors, meanwhile, has been on the acquisition hunt for transit-oriented projects lately after buying the shops at University Station, in Westwood, MA, for $206 million in August and the Foundry Square III office building in San Francisco’s Transbay District in December.
Dive Insight:
Downtown Chicago is a hive of residential construction activity, particularly at the higher end of the market, driven by a strong job market there. That’s due in part to corporate relocations, as companies turn to more affordable markets in the Midwest and Rust Belt, in particular, for expansions or relocations, according to Zillow.
That’s playing out in Chicago today. A string of companies have recently announced plans to relocate to the Windy City, among them design and engineering firm Exp, which is relocating its headquarters from Toronto; construction equipment supplier Caterpillar, which is moving is head office from Peoria, IL; and McDonald’s, which is building its new corporate office in Chicago, near Madison at Racine.
The rapid increase in residential building activity has the city's rental market nearing saturation, according to a recent report, which noted that tight financing is preventing the excess rentals from being converted into multifamily, a factor that could trigger rents to drop later this year.
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