Chicago’s Garfield Park neighborhood has seen significant investment over the past decade as owners have bought and renovated rental properties.

However, most of those apartments have been smaller, in the 10- to 12-unit range, according to Ted Stratman, a managing partner at Chicago-based commercial real estate investment services firm Interra Realty. 

So, it's not surprising that investors took note when Interra brought Madison Terrace, a 96-unit apartment building, to market last year on behalf of Los Angeles-based owner ShainRealty Capital. 

“We had probably seven or eight offers over the course of the marketing period,”  Stratman said. “While we were under contract with the deal, which was done from October of last year to now, many parties were still interested in the deal and reached out to us asking if it was available.”

Madison Terrace carries a fixed-rate Fannie Mae loan of 2.83%, locked in until 2027. That loan, with a rate about one-third below the current market, also attracted bidders. 

“We had two different types of buyers looking at the deal,” Stratman said. “One was to assume the loan. But you also still had a lot of investors looking at the deal just based upon current market rate debt, either from Fannie Mae or Freddie Mac, just because the property supported a substantial loan amount.”

Buyer emerges

Ultimately, Chicago-based Icarus Investment Group bought the property in March 2024 for $11 million, roughly $115,000 per unit, assuming the Fannie Mae loan. Interra’s press release, citing CoStar data, said that was one of the highest per-unit prices paid in the submarket in the last decade.

“While the loan-to-value may have been lower than typical for some other transactions we've seen historically, I think it gave the buyer some certainty knowing that they had fixed-rate, low-cost debt,” said Lucas Fryman, a managing partner at Interra. “And it gave them flexibility in terms of implementing their business plan over time.”

Madison Terrace, built in the 1980s, includes a mix of two-, three- and four-bedroom apartments, on-site laundry and 70 parking spaces, according to an Interra release shared with Multifamily Dive. The property sits a block from the 184-acre Garfield Park, whose conservatory is one of the largest in the country, and a half-mile or less from stations along the Chicago Transit Authority’s Green and Blue lines and Metra’s Union Pacific West line.

A portion of the units are reserved for low- and middle-income households earning up to 80% of the area median income. ShainRealty Capital had renovated roughly half of the property's units. Icarus plans to continue renovating apartments as residents move out, according to Stratman.

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