The Drexel 8031-8035 S Drexel Ave 12 Unit Apartment Building $875,000 ($72,917/Unit) 10.90% Cap Rate Chicago, IL 60619

Nara Advisors is pleased to exclusively market for sale 8031-8035 S Drexel, a 12-unit apartment building located in Chicago's Chatham neighborhood. The property consists of six 2-bedroom, 1-bathroom units and six 1-bedroom, 1-bathroom units. All twelve units are subsidized by the Chicago Housing Authority (CHA) via a Project Based Voucher Housing Assistance Payments (HAP) Contract with an initial term that extends to 2044. Sale is subject to approval of Buyer by CHA/City of Chicago.
Originally built in 1926, the property was fully gut renovated in 2014. Approximately $1.2 MM was invested in improving the property. Building updates include new systems and mechanicals including new electric, copper plumbing, central boiler and hot water tanks, as well as new windows, roof and porches. The units were updated with new hardwood flooring, drywall, light fixtures, doors and hardware, updated bathrooms with new sinks, tile and baths and new kitchens including granite countertops, stainless steel appliances and dishwashers. There is also a common laundry room available for tenants.
Leasing is provided by CHA through the Project Based Voucher, meaning an active manager can guarantee 100% occupancy. A buyer can achieve an in-place 10.9% cap without any rental increases. This property represents a unique opportunity to acquire a gut-renovated asset with a highly desirable Project Based Voucher in place.
The project was capitalized with a forgivable NSP Loan from the City of Chicago in the principal amount of $1,917,166. The NSP Loan is forgiven on a pro rata basis annually over a period of 15 years, beginning on October 10, 2014 and terminating on October 9, 2029, provided the loan assignee remains compliant with the affordable housing contract during the term. The unforgiven principal balance as of October 10, 2024 will be $511,244.