CHICAGO, IL - Interra Realty, a Chicago-based commercial real estate investment services firm, today announced it brokered the $7.8 million sale of a 14-building, 289-unit portfolio of affordable apartments located primarily on Chicago’s West Side. The buyer, Chicago-based real estate investment firm Villa Capital Partners (VCP), purchased the portfolio from Chicago-based nonprofit NHS Redevelopment and plans to spend about $3 million to renovate the properties, which will remain affordable under a seven-year contract with the city.
“This is one of the largest West Side transactions of its kind in recent years and reflects the broader push for the preservation and rehabilitation of affordable units throughout the city,” said David Goss, co-founder and managing principal of Interra. Goss brokered the deal with Jon Morgan, also a co-founder and managing principal of Interra, and Lucas Fryman, a director at the firm.
Founded in 2005 by Erik Hubbard and John Pagone, VCP focuses on building wealth in underdeveloped and emerging communities throughout Chicago and the Midwest. The firm has managed the affordable housing portfolio since December 2015 and will continue to do so as owner.
“Because we have operated these communities for over three years, we were already ‘invested’ in them and saw an opportunity to use our familiarity with the buildings, and the residents who call them home, to make thoughtful improvements in conjunction with our extension of their affordable housing contracts,” said Hubbard, managing principal of VCP. “As a company, we are committed to the health and revitalization of all of Chicago’s neighborhoods, and this investment directly aligns with that mission.”
The buildings are located in Chicago’s Austin, East Garfield Park, West Humboldt Park and North Lawndale neighborhoods on the West Side, and in Roseland on the South Side. All but one of the properties is vintage; the community in Roseland is about 20 years old. As a whole, the portfolio comprises a mix of one-, two-, three- and four-bedroom units.
A newly released report from DePaul University’s Institute for Housing Studies found that the number of affordable housing units in Chicago is in decline, with the share of affordable units in the Humboldt Park/Garfield Park submarket, which includes North Lawndale, dropping by 5.3 percentage points between 2012-14 and 2015-17. In Austin, the share of affordable units dropped 6.2 percentage points in the same time period. The declines put further pressure on low-income households and are likely accelerating their exodus from Chicago, the report says.