Distress now hits a massive Chicago apartment complex after its owners fell behind on its debt payments and failed to sell it.
A Chicago apartment complex, known as Upshore Chapter, is at risk of foreclosure after its owners fell behind on debt payments and failed to sell the property before the maturity date of its $39 million loan.
Developed by CRG, this 149-unit high-rise at 4555 North Sheridan Road was built for approximately $30.7 million, or over $200,000 per unit, and completed in 2019.
The building features amenities such as a 2,000-square-foot rooftop deck, a gym, a business center, and a dog salon, alongside 5,300 square feet of retail space.
After refinancing with a securitized loan in 2021, CRG attempted to market the property last summer through CBRE’s multifamily team but could not find a buyer.
The listing has since been removed, and the loan was subsequently placed on a watchlist and then moved to special servicing due to delinquent payments since August.
The challenges may be linked to floating rate debt, which has become problematic for many multifamily properties in Chicago as interest rates have risen since the loan’s origination.
Despite a recent announcement of federal rate cuts, these changes may not benefit properties like Upshore Chapter in time.
While Chicago has experienced increased multifamily transactions driven by strong rent growth, results have varied for sellers.
An urban-suburban divide is emerging, affecting property performance based on location.
For instance, a recent sale saw a 28-story West Loop apartment building sold for $76.3 million, a 20% decrease from its 2016 purchase price.
In contrast, suburban areas, including Chicago and Miami, have been highlighted as top multifamily markets, with new developments continuing to emerge.
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Also Read: The Commercial Real Estate Crisis Is Now Creating Painful Losses
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