Brookfield's Northwest Side Apartment Complex with 1,115 Units Hits the Market

Brookfield Asset Management, a key player in real estate, is gearing up for a significant move in suburban Chicago. The Toronto-based firm has enlisted the expertise of Newmark brokers Liz Gagliardi and Chuck Johanns to facilitate the sale of Pavilion Apartments, a colossal 1,115-unit complex located at 5441 North East River Road, in close proximity to O'Hare International Airport on the Northwest Side of Chicago.

Record-Breaking Potential: Unveiling the Multifamily Marvel

Though the official asking price remains undisclosed, insiders familiar with the matter anticipate bids circling around the $150 million mark, translating to approximately $135,000 per unit. Even if the transaction settles slightly below this threshold, it would still mark a historic moment, surpassing the previous record for the highest-priced suburban multifamily deal set by the $139 million Bourbon Square sale in Palatine last year.

Brookfield's Strategic Acquisition and Transformation

In 2018, Brookfield acquired Pavilion Apartments as part of its impressive $6.8 billion deal for Forest City Realty Trust. Notably, the firm recently converted all 223 affordable units on the premises into market-rate apartments. The 16-story complex currently boasts a 97 percent occupancy rate, offering "naturally affordable" units with an average monthly rent of $1,573. Laden with amenities such as tennis courts, pools, and a fitness center, the property recorded a robust net operating income of over $7.8 million in 2022.

Chicago's Apartment Demand Amidst Economic Flux

The anticipated high sale price underscores the thriving demand for apartments in Chicago. This demand surge is attributed to elevated interest rates dissuading home purchases. Despite this, caution among investors, driven by rising borrowing costs, led to a 64 percent decline in national apartment sales in the first nine months of the year, according to MSCI Real Assets.

Brookfield's Diverse Chicago Portfolio

Brookfield's influence extends beyond Pavilion Apartments, with a notable presence in Chicago's real estate landscape. Their portfolio includes prominent assets such as the recently refinanced Oakbrook Center mall, secured with a new $700 million loan, and the Northbrook Court mall earmarked for redevelopment. Additionally, the firm owns the Aloft at the Glen Town Center apartments in Glenview, showcasing the breadth and depth of Brookfield's strategic holdings in the Windy City.