3543-3547 N Pulaski is a ten-unit property just south of Addison in the Avondale neighborhood of Chicago. The property was originally built as a condo property but the developer wound up a casualty of the financial crash of 2008-2009. Ownership was initially brought in to manage the property as a receiver. During this process, we worked closely with the lender to recast the loan to our group and turn it in to a performing loan on their books. This was our first acquisition as Crosstown Real Estate in 2010.
We immediately converted the property from condominiums to apartments and quickly filled up the 8-units (mostly 2 BR units of approximately 1,500 sf each). We then turned the focus to the two street-level commercial units and decided to occupy one for our own office and lease out the other to a commercial tenant on a month-to-month basis, which lasted almost a decade.
Ownership was successful in keeping the residential units 100% occupied throughout the holding period and then signed two new commercial leases (both to therapist groups) for the first floor at the beginning of 2022. Once these deals were inked, we felt we had maximized value for the property and sold it to a group in the late Spring.
Our original thesis held firm (low entry basis, successful apartment conversion) and we were successful in achieving outsized returns to our investors (25%+ IRR) and a very robust 8.4x equity multiple.