October 26, 2021 We are pleased to announce that Randolph Street Realty Capital and joint venture partner Origin Investments have completed the sale of 119 on Main, a 49-unit multifamily asset with ground floor retail space located at “Main and Main” in downtown Naperville, IL.
At the time of the disposition, 119 on Main was one of the longest held assets in RSRC’s portfolio. The joint venture’s business plan produced tremendous results: a 25% internal rate of return (IRR) and a 5.40 equity multiple to LP Investors over a nine-year holding period.
“This investment is a true demonstration of buying an exceptionally well-located asset and executing a strategic business plan to realize a long-term vision and substantial returns,” said Ken Lodge, Origin Investments. “Contributing to our ability to significantly enhance the value of the asset was our ability to leverage the property’s position as one of the only true multifamily projects in a vibrant suburban downtown market like Naperville.”
Randolph Street and Origin acquired 119 on Main in 2012. At the time of acquisition, the asset was master leased to North Central College which operated the property as student housing units. Additionally, the deal was subject to an underlying ground lease which limited the position to a leasehold rather than fee-simple interest.
At the expiration of the master lease in August 2017, the partnership engaged in a comprehensive renovation program, totaling more than $2.6 million, that refurbished all 49 units, overhauled the property’s common areas, and created 1,390 square feet of rentable ground-floor retail space. That space, which previously had not been monetized, ultimately was leased to LUSH Cosmetics.
Adding to the attractiveness of the investment and deepening the potential future buying pool, the
partnership acquired the underlying ground lease at an attractive 10% yield on the $1M incremental investment earlier in 2021.
119 on Main is located on Main Street, just north of the Jefferson Street intersection. This is a “Main and Main” location in the heart of downtown Naperville. Restaurants and shopping are literally at the doorstep of 119 on Main.
“This has been a great investment opportunity for Randolph Street and Origin,” said Jon Saliterman, Randolph Street Realty Capital. “With returns maximized and the tremendous demand for multifamily assets, it was an appropriate time to execute our exit strategy.”
Marty O’Connell, David Gaines, and Kyle Butler with JLL Capital Markets represented Origin and
Randolph Street in the transaction.