Origin investments and Randolph Street Realty Capital sell The Iroquois Club in Naperville
NAPERVILLE - Origin Investments and its joint venture partner Randolph Street Realty Capital have completed the disposition of The Iroquois Club, a 272-unit apartment complex at 1101 Iroquois Avenue in Naperville, for $69.8 million. The sale capitalizes on the strength of Chicago's suburban multifamily market and a favorable capital markets environment. Origin has leveraged those market conditions to complete their third suburban disposition in roughly 120 days.
The buyer, a private, Chicago-based investor, has an extensive portfolio of properties in the Chicago metropolitan area that is managed by TLC Management.
Over the six-plus year holding period, the sale of The Iroquois Club generated Origin's investors an internal rate of return (IRR) of 21% and an equity multiple of 2.99x.
"We accomplished the comprehensive business plan we established for The Iroquois Club," said Marc Turner, Managing Director of Investment Management, Origin Investments. "Having done that, and with a capital markets environment that is extremely favorable for suburban multifamily assets, it was an ideal time to sell and provide some very good returns to our investors."
Origin and Randolph Street acquired the asset, a fractured condo conversion project, in September 2015 and executed an extensive, multitiered value-add investment and management strategy. Highlights of that strategy included:
• Acquiring 30 condo units to simplify title and create a fee simple interest ownership structure and effectively repaired the fractured ownership structure that previously existed.
• Converting eight larger, customized former condominiums into 16 units, increasing the number of residences from 264 to 272 units.
• Completing extensive improvements to approximately 60% of the units, ranging from upgrading appliances and lighting to a complete unit makeover including cabinets, flooring, and countertops.
• Completing significant improvements to common areas as well as interior and exterior amenities such as the clubhouse, fitness center, sauna, and pool deck.
At the time of disposition, The Iroquois Club had an occupancy of 97.4%, in-line with the broader suburban Chicago market as of year-end, according to Axiometrics.