Inland unit pays nearly $12 million for condo project turned rental
By: Abraham Tekippe
May 10, 2012
(Crain's) — The rising apartment market has saved a 59-unit condominium project in Albany Park from the sinking condo market.
The venture that built the Kimball Station development sold the property at 4730 N. Kimball Ave. last month to a unit of Oak Brook-based Inland Real Estate Group of Cos. The development venture, which rented out all the condos in the building, sold the property for $11.8 million, nearly $1.4 million more than the original loan on the project, county records show.
That's a good outcome in the current condo market and another example of how strong rental demand and rising apartment values are providing an escape route for condo developers that otherwise wouldn't be able to pay off maturing construction loans.
Located directly across from the Kimball Brown Line station, the condo project, which includes 6,000 square feet of commercial space and an underground parking garage, was converted to one-, two- and three-bedroom apartments in 2009.
“Sometimes lenders . . . are willing to take an asset that has not performed to plan and agree to an alternative,” said Brian Semel, a managing director at Kiser Group, a Chicago-based brokerage that represented both the buyer and the seller in the sale. “In this case, they felt that they could generate significant cash flow converting (Kimball Station) to rental rather than selling individual units in a very down market.”
Seamus Murnin and Rory Arthurs, leaders of the venture that developed Kimball Station, could not be reached for comment. An Inland spokesman also did not respond to a request for comment.
Today, all 59 of the building's units are leased, according to Mr. Semel. He added that Inland intends to find tenants to fill the rest of the building's commercial space, with just 2,500 of the 6,000 square feet currently leased.
Condo developers need the blessing of their lenders before switching to rental, something that's not always easy to get, say Alex Samoylovich and Jay Michael, partners at Chicago-based apartment investor Cedar Street Capital.
“If the developer and lender work together . . . both parties can come out of it less harmed,” Mr. Samoylovich said. “This will be one of the few projects that have successfully been able to repay a lender.”
A spokeswoman for the lender, State Bank of Countryside, declined to comment. The original maturity date on the loan was December 2010.
Mr. Michael said Kimball Station's location in Albany Park, which he called “a classic North Side Chicago market,” also works to the property's advantage.
"It's a really strong rental market," he said. "It's got a lot of diversity and people really love living there. You're close to Lincoln Square. You're close to everything."Keyword : Inland Sale , Inland Kiser Group Sale , Inland Real Estate Group , Inland Real Estate Group Kiser Group , Inland Real Estate Group Kiser Group Sale , Inland Real Estate Group Sale , Inland Real Estate Group 4720 N. Kimball , 4720 N. Kimball , 4720 N. Kimball Sale , 4720 N. Kimball Kiser Group Sale , Kimball Station Kiser Group Sale , Kimball Station Kiser Group Press Release , Kiser Group Press Release Crain's , Kiser Group Crain's , kiser , Kiser Group Crain's Chicago Business , group , kiser group , commercial , real estate , commercial real estate , chicago , multi-family , chicago multi-family , chicago commercial real estate brokerage , chicago real estate brokerage , chicago commercial real estate , chicago multi-family real estate , apartments for sale , chicago apartments for sale , chicago apartment sale , chicago apartment sold , albany park apartments sold , albany park sold properties