Kedzie - SOLD

Realized Gross Returns:
IRR: 27%
Equity Multiple: 2.1x
Hold Period: 6 Years

1701-1703 N Kedzie Ave, Chicago, IL 60647
Strategy: Add Value, Cash Out Refinance
Status: Realized
Purchase Price: $2,650,000
Acquisition Date: 12/9/2015
Sale Price: $3,240,000
Sale Date: 12/28/2021
Units: 9 Units
Repeat Broker, Repeat Seller, Realized

Kedzie is a luxury rental building in the rapidly-growing Logan Square neighborhood.

Our firm acquired California and Kedzie from a well-known local condo developer. The seller was an excellent builder but was not obtaining the rental rates these buildings should have commanded. Rents were significantly below market, and we acquired the properties at a price based on current rental rates.

We immediately executed on our improved revenue management of the asset by moving all rental rates to market and charging for parking separately. We obtained multiple property tax reductions. Taxes remained well under our initial underwriting.

Within 18 months, we increased the rental income by 18%. 20 months after acquisition, we closed on a refinance with a loan balance of $2,660,000 which was in excess of our purchase price and allowed us to return 100% of the initial equity to our LP tax free. Kedzie appraised for $3,330,000 during this refinance—a 26% value increase in less than 2 years.