Hollywood Tower Sells for $14M

CHICAGO-Hollywood Tower, a 161-unit multifamily rental building at the northern end of Lake Shore Drive, has been acquired by Chicago-based Horizon Realty Group for $14 million. That represents a price of $86,957 per unit for the property at 5650 N. Sheridan Rd.

Located in the Edgewater community, the building is in a rare submarket that has seen modest rent increases as well as a lower vacancy rate. The only other submarket that can make that claim this year is southeast Cook County, according to Marcus & Millichap Real Estate research.

The deal was brokered entirely by Marcus & Millichap Real Estate Investment Brokerage Co. senior investment associate Lee Kiser. The seller was an unidentified Palatine-based investor.

The deal is part of a market trend of a deep pool of willing buyers despite weak market fundamentals, including a class-A vacancy rate of 9.5%, according to Marcus & Millichap’s most recent local market report. The price per unit is up 16% over the same period a year ago, according to the brokerage firm, while capitalization rates range from 7.5% for class A buildings to 8.25% for class-B assets.