Property: The Monarch
Buyer: Coastal Ridge
Seller: CP Capital
Property type: Mid-rise
Units: 236
Location: Des Plaines, Illinois
Purchase price: Withheld
When New York City-based real estate investment manager CP Capital looks to partner with developers and fund new projects, it has specific geographies in mind.
“We're targeting suburban areas,” Jay Remillard, managing director at CP Capital, told Multifamily Dive. “The ideal asset for us is 20 minutes outside of Chicago, Boston, Charlotte, Tampa, etc. We know that we can build a world-class luxury facility for a much lower basis than we would downtown and probably do it a lot quicker.”
The speed is partially due to the land assemblage process in the suburbs. “We're not going to have to aggregate multiple parcels,” Remillard said. “We're going to buy one piece of land from one seller. And, we're generally going to be able to rent out larger apartments for a pretty significant discount to what someone would pay in urban Chicago, for example.”
Case in point: The Monarch, a 236-unit, four-story, wrap-style property in Des Plaines, Illinois, built in 2020. The apartment community may not be in Chicago, but it's close to Interstate 294, Interstate 90 and US 58 — three major thoroughfares providing direct access to a variety of employment hubs, including the Rosemont, O’Hare International Airport and downtown.
The Monarch’s Class-A finishes include granite countertops, stainless steel appliances, Nest smart thermostats, custom walk-in closets, wood-style flooring and heated tile floors in the master bathrooms. Amenities include a fitness center, pool and spa deck, yoga studio, parking garage, game room, pet spa and pet park, gas grills and a modern clubhouse.
CP Capital funds developments with high-end finishes, but it doesn’t plan to be a long-term holder.
After talking to brokers, CP Capital had a fairly good handle on The Monarch’s value and brought the property to market.
“We’re opportunistic in nature,” Remillard said. “Our general investment horizon is 36 to 48 months. We're trying to partner with local developers, build the asset, lease it up and then sell it in as compressed a timeframe as possible for obviously the highest price possible.”
Roughly three years after The Monarch opened, CP Capital sold it to Columbus, Ohio-based apartment owner, manager and developer Coastal Ridge earlier this month. The property was 100% leased and 99% occupied and has seen double-digit rent growth.
“Buyer interest was indicative of a market that if it hasn't fully reawakened, which I don't think it has, is one where people want it to reawaken,” Remillard said. “But they have an interest at a particular level.”
Ideally, Remillard says the sale would have occurred even earlier, but Cook County had a 10-month backlog to handle assessment appeals in 2021.
“We looked at it and we said, ‘Hey, we're a couple of years longer on the hold here than we'd like to be,’” he said. “We built it for a low enough basis where even in a more tricky capital markets environment, we can still have a pretty successful outcome here.”
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