Argosy Real Estate Partners Invests in 820 South Michigan Avenue
On November 27, 2017, Argosy Real Estate Partners IV, L.P. and its parallel Funds (“AREP IV”), in joint venture with 3L Real Estate, acquired a vacant 129,000 square foot office building on Michigan Avenue in the South Loop submarket of Chicago, IL. The property will be converted to 150 multifamily units and 5,000 square feet of ground-floor retail. AREP IV’s all-in basis after conversion will be significantly below both replacement cost and comparable trades of multifamily properties in downtown Chicago.
The business plan is to deliver a high-quality, affordably-priced living option on a prime infill site targeted to the growing population of young professionals who value cost savings and seek to live in the highly-amenitized and increasingly desirable South Loop neighborhood. The apartments will have an average unit size of 521 square feet, offering affordable monthly rents significantly below those for new Class A product in the area. The units will feature 12’–15’ ceilings with oversized windows and the majority of units will offer views of Grant Park and Lake Michigan.
The property is located on Michigan Avenue directly across from Grant Park. The South Loop is home to 30 post-secondary educational institutions, which are all located within a one-mile radius of the property, and cumulatively enroll nearly 100,000 students. The South Loop’s rapid redevelopment is continuing, driven by the neighborhood’s rich amenities, access to public transportation and the interstate highway system, and the short walking distance to numerous employers located within the heart of Chicago’s Central Business District The property is also located within walking distance to many of the city’s largest attractions such as Soldier Field, Grant Park, Millennium Park, the Field Museum, Shedd Aquarium, Adler Planetarium, the Lake Michigan Shore, and Michigan Avenue Shopping District.
820 South Michigan Avenue has been acquired in partnership with 3L Real Estate, a local multifamily owner/operator formed in 2015 by Joseph Slezak. Mr. Slezak previously oversaw all parts of acquisition, financing, sale, construction management, and property management for over 100 properties across greater Chicago, including a number of office-to-multifamily conversion projects.