Starting in 2010, we became a substantial funding source for a Chicago-based real estate investment firm that demonstrated an expertise in acquiring turn-of-the-century 24-36 unit apartment buildings, modernizing and re-leasing them, and then selling the properties. Their target markets are on the north side of Chicago in neighborhoods such as Wrigleyville, Bucktown, and Logan Square, with a particular focus on properties situated close to mass transit and in areas where Millennials are now raising families. These apartments were made more desirable by converting older one- and two-bedroom units into two- and three-bedrooms, and reconfiguring them into open concept living spaces with updated kitchens and bathrooms.
In our opinion, this is a true value creation strategy, which we find more appealing and less risky than buying an asset and waiting for the market to drive up value. Over the past six years in four successive funds our clients have achieved IRRs in excess of 25% annually from these investments.