DRA Advisors Sells Suburban Chicago Multifamily Building to Osso Capital for $95M

Osso Capital, a New York-based firm co-founded by former Blackstone executives Spencer Vegosen and Olivia John, has secured a significant $95 million deal in suburban Chicago's multifamily real estate market. This strategic acquisition saw Osso purchasing the 732-unit Woodlands complex in Crest Hill from New York-based DRA Advisors. In recent transactions, Osso also acquired the Ovaltine Court multifamily asset in Villa Park for $78 million, demonstrating strong investor interest in suburban Chicago apartments despite the impact of rising interest rates.

Thriving Suburban Multifamily Market

The multifamily rental market in the Chicago area has seen a remarkable 24 percent growth in rents over the past two years, according to Integra Realty Resources. With only 10.4 percent of properties offering concessions on leases, typically a half-month's rent, the market remains highly competitive. While interest rates present challenges, sellers continue to realize healthy returns, even though some may contemplate what might have been had they sold earlier.

DRA's Crest Hill Success Story

DRA Advisors' successful investment in the Crest Hill asset is noteworthy. They originally purchased the property for $65 million in 2018, and its value has since increased by 46 percent due to renovations and near-full occupancy, as confirmed by JLL marketing materials. The seller was represented by JLL brokers Kevin Girard and Zachary Kaufman in this impressive transaction.

Osso Capital's Financing Strategy

To facilitate these acquisitions, Osso Capital leveraged financing from JLL Real Estate Capital. The Crest Hill property received a $71.3 million loan, while the Villa Park property was financed with a $54 million loan. These deals illustrate Osso's commitment to investing strategically in the suburban multifamily real estate sector.

Resilience of the Suburban

Chicago Multifamily Market The suburban Chicago multifamily market continues to thrive, with slight fluctuations in occupancy rates. Average occupancy for suburban Chicago apartments dipped to 97.5 percent in the first half of the year, remaining above the historical average. The market remains attractive to investors looking for opportunities in the multifamily sector.

In summary, Osso Capital's recent $95 million investment in suburban multifamily real estate, particularly the acquisition of the Woodlands complex, underscores the strong demand for such properties in suburban Chicago. Despite the challenges posed by rising interest rates, both buyers and sellers are navigating the market to secure profitable deals.