D
RA Advisors, a New York-based investment firm, has made its return to the Chicagoland multifamily market with the acquisition of the 400-unit Ascend St. Charles apartment complex in western suburb St. Charles for over $90 million. The property features 20 three-story buildings spread across more than 20 acres and was purchased from Los Angeles-based Broadshore Capital Partners, which had acquired it for $81.5 million in 2017.

    The deal marks a shift for DRA, which has been selling off pieces of its $540 million Midwest retail portfolio concentrated in the Chicago area. The firm partnered with Naperville-based multifamily player Marquette Companies on the acquisition. Despite Broadshore's initial listing price of close to $100 million, it still came out ahead after purchasing the property at a lower value.

    The suburban apartment market has seen significant rent hikes over the past year, driven by a lack of new supply. However, skyrocketing property taxes have taken a toll on Chicago-area property values, with some investors seeking shelter in suburban markets like St. Charles. The Ascend property's tax bill increased by 75% during Broadshore's holding period.

    DRA and Marquette's purchase price was recorded as $80 million in Kane County records, but the buyers made additional allocations toward the seller's personal property, closing costs, reserves, and guaranties. It is unclear how effective this strategy will be with tax officials. The buyers secured a $62 million mortgage loan from Athene Annuity and Life Company, which was pegged at about 65% of the purchase price.