David Luski’s DRA Advisors injected $53 million into the Chicago-area multi-family market in a purchase from a Blackstone affiliate, capping a year in which investors were buoyed by strong rental growth.
Real estate giant Blackstone cashed in on a 236-unit apartment complex in suburban Buffalo Grove after acquiring the Philadelphia-based real estate investment trust that purchased the property in 2016. Blackstone sold the property, Windbrooke Crossing at 1160 Windbrooke Drive. , this month for $5 million more than it last traded for six years ago, Lake County property records show.
New York-based DRA paid $53 million for Windbrooke immediately after its former owner, Philadelphia-based Resource REIT, was bought for $3.7 billion in a deal that included its debt to Blackstone in May, they show. public records. Resource bought the apartment complex for $48 million in 2016, according to published reports. DRA and Blackstone did not return requests for comment.
The deal for the 1986-built asset equates to a smaller margin on its prior sale than the jumps in value represented by recent deals for similar multi-family assets in Chicago’s north and northwest suburbs. Bayshore, for example, bought a 344-unit Mount Prospect property first built in 1973 for $50 million this summer, 50 percent more than the $33 million it last sold for in 2014, though nearly half of the units in that complex have been renovated with new cabinets. Appliances and allowance from the previous owner. It’s unclear if the Buffalo Grove property has undergone any recent updates.
The exchange also marks a strengthening of DRA’s Chicago-area multi-family holdings, which already included more than 2,900 housing units in several other large properties in suburbs such as Wheeling, Lisle, Bensenville and Naperville.
DRA bought the property as multi-family vacancy is near a record low in suburban Chicago, falling to about 3 percent in June, according to a third-quarter report from Marcus & Millichap that noted the pandemic-induced flight to the suburbs that has continued among aging millennials. Rental growth across Chicagoland has remained strong, according to the report, which forecasts a year-over-year increase of nearly 10 percent.
The exchange comes as Blackstone Real Estate Income Trust is restricting redemption requests after a violation of its quarterly repurchase limit. Rising interest rates have hampered the fund’s ability to make acquisitions.
DRA also has a large portfolio of retail assets in the Chicago area, totaling 5.6 million square feet across 45 properties, according to its website. Its other acquisitions this year include a $164 million landmark Miami office skyscraper it bought in a joint venture with CP Group, and a portfolio of 33 grocery-anchored mall assets in eight Northeast states that DRA bought in a joint venture. Joint venture with KPR Centers of Cedar. Realty Trust for $840 million.