Glen Ellyn Apartments Fetch $32 Million

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January 25, 2016

Glen Ellyn apartments fetch $32 million

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Arbors of Glen Ellyn is across the street from the College of DuPage.
Photo by CoStar Group

Chicago apartment landlord Stuart Handler is expanding his push into the suburbs, buying a 264-unit complex in Glen Ellyn.

A venture led by Handler paid $32.4 million for the Arbors of Glen Ellyn at 325 Ramblewood Drive, according to Handler, CEO of Chicago-based TLC Management. The venture bought the property from Friedkin Realty Group, a San Francisco-based investor that paid $24.2 million for it in November 2012.

For years, TLC stuck to the city and Evanston, steadily amassing an apartment portfolio stretching from the near-north suburb down to South Shore. But Handler, who buys about two properties a year, has expanded his horizons, scouting more deals in the suburbs, which offer a diversification opportunity and, in some cases, more attractive prices.

In December 2014, a Handler venture paid $26.3 million for Forest Cove, a 300-unit property in Mount Prospect. It was his first suburban acquisition outside Evanston. With the addition of the Glen Ellyn property, TLC owns 3,452 units in 57 properties.

Rather than sticking to a single theme, Handler takes an “I know it when I see it” approach to acquiring suburban properties.

“It depends on the asset and suburb,” he said.

With the Arbors of Glen Ellyn, Handler likes the property’s proximity to the College of DuPage, right across the street. He also sees an opportunity to fix up the complex and hike rents. He expects to spend “a couple million dollars” renovating the common areas, building a new clubhouse, adding new landscaping and fixing apartments on an as-needed basis.

Aided by a strong suburban apartment market, Friedkin has already jacked up rents at the property. Including concessions, the average apartment at Arbors of Glen Ellyn rented for $1.48 per square foot in third-quarter 2015, up 18 percent from $1.25 two years earlier, according to a report from Appraisal Research Counselors, a Chicago-based consulting firm.

Rents there range from $934 for a one-bedroom unit to $1,794 for a three-bedroom, according to the report. The complex was 96.4 percent occupied in the third quarter.

Handler classifies the Arbors, built in the 1970s, as a Class B property.

“We’re going to get it up to a B-plus,” he said.

Friedkin, meanwhile, has been in selling mode after gobbling up more than 3,000 apartments in the Chicago suburbs over the past few years. The company put five properties up for sale last year and sold one for a big gain, Parkway Commons in Carol Stream.

A Friedkin executive did not immediately return a call.