The owner of a 24-story apartment tower in downtown Evanston has put the building on the market, aiming to attract interest from investors that like fixer-upper properties.
TH Real Estate, formerly TIAA-CREF, has hired Chicago brokerage Moran to sell the Park Evanston, a 283-unit building at 1630 Chicago Ave. that could fetch more than $140 million, according to a person familiar with the property. The sale also includes ground-floor retail space leased to Whole Foods Market and other tenants.
Built in 1997, the Park Evanston used to be one of the fanciest on the North Shore. But it has been eclipsed by newer projects with high-end amenities and finishes. Now Moran is pitching the building to so-called value-add buyers: investors that renovate tired buildings, betting they can hike rents and boost the value of the properties.
An investor could spend about $15,000 a unit about $4.3 million fixing up the building’s apartments and common areas to bring it up to the level of its competition, said Moran Managing Director Peter Evans. Its location, in the center of downtown Evanston, a few blocks south of Northwestern University, is a big selling point, too.
“You can take it and make it the best product in the market,” Evans said.
Yet the North Shore apartment market remains healthy. The median net rent rose to $2.40 per square foot in the second quarter, up 9.8 percent from a year earlier, according to Appraisal Research Counselors, a Chicago-based consulting firm. But the occupancy rate fell to 94.6 percent from 95.7 percent over the same period.
TIAA paid $101 million for the Park Evanston in 2008. Rents there range from $1,621 a month for a studio apartment to $4,354 for a three-bedroom unit, according to real estate information provider CoStar Group. The building is 99 percent leased, Evans said.
“This is a high-rise product in the desirable downtown location of Evanston that we believe will be sought after by the current capital markets, given the mix of Whole Foods on the street level beneath a residential rental tower that is well-positioned for a renovation,” Brian Eby, senior director at New York-based TH, an affiliate of Nuveen, said in a statement. “The walkability of the site and demand drivers from downtown Evanston and Northwestern constitute a durable and proven base of tenancy.”