2019 proved to be a busy and prosperous year for the Marquette Companies, a Naperville, Ill. based real estate developer, owner and operator. Celebrating its 36th year in business, Marquette completed over $500 million in transactions in 2019, including new development, refinancing, dispositions, recapitalizations and acquisitions; with an additional $150+ million on the books heading into the new decade. Marquette currently operates more than 11,500 apartment units throughout the central United States, a portfolio in excess of $2.25 billion.
Investing in the late stages of a cycle requires discipline and hard work to be successful. Marquette utilizes a variety of strategies, including strategic development, recapitalization, acquisition and repositioning of workforce, value-add and core-plus multi-family, in partnerships with more than a dozen institutional investment firms and scores of private investors to create above market value returns.
The real estate firm completed $170 million in developments located in the Fulton Market district of Chicago as well as suburban Chicago markets, including: The Mason, a 263-unit 14-story high-rise development with unobstructed views of the Chicago skyline; Marq on Main, a 202-unit mixed-use, transit-oriented development in Lisle, Ill.; and HighPoint Town Square, a 72-unit expansion of the existing 624-unit award-winning HighPoint Community in Romeoville, Ill.
Marquette broke ground on a $75 million opportunity zone development in the East End district of downtown Houston, and received approval for a 243-unit transit-oriented development with 30,000 square feet of office space as an expansion of Marquette’s development initiative in Fulton Market of Chicago. Marquette is in the process of finalizing plans for another 280-unit 25-story high-rise building at 1400 West Randolph, which is scheduled to break ground in late 2020.
Acquisitions proved to be a challenging endeavor in 2019; however, Marquette was able to acquire the Medical Center Apartments project, a 306-unit development located at I-290 and Damen Avenue in Chicago’s Medical District, with plans to renovate the existing building and develop two additional 200-unit towers, plus a medical building on the four-acre site. The Medical District is in the midst of an aggressive expansion and Marquette has timed its investment within the district to coordinate with other medical office, retail and hotel developments.
River Run at Naperville, a 206-unit property in Naperville, Ill., was marketed and sold in the third quarter after an aggressive two-and-a-half-year renovation and lifestyle repositioning effort, generating returns that far exceeded the proforma.
Marquette successfully completed the recapitalization of two of its luxury developments – Catalyst Houston (in October 2018) and Marq on Main (in December 2019) – totaling almost $200 million, creating a win-win for both the development partners and the long-term core investment partners. Marquette will continue with the recapitalization strategy and has targeted more than $175 million of partially completed value-add properties as opportunities for 2020.
At the end of 2019, the firm was under contract for a workforce housing property in suburban Chicago, and a value-add property in Houston, totaling more than 600 units and $95 million, both of which are scheduled to close in early 2020.
In addition, Marquette is moving forward with a $48 million FHA refinancing of one its legacy properties with an agency supplemental on another property, a total of 604 units, both designed to enhance returns and provide funds for further value-add repositioning.
The property management division wrapped up a strong and active year as well, completing more than 800 unit renovations, numerous clubhouse and amenity renovations, three lease-up assignments, and was awarded management contracts for four different institutional clients.
The apartment market continues to remain balanced and strong in most major markets. Marquette’s 2020 strategy anticipates a similar volume of activity, with plans to acquire 1,500 to 2,000 units of workforce, value-add and core-plus opportunities, as well as the development of more than $200 million in highly targeted markets of Chicago and Houston.
Marquette remains cautiously optimistic about the state of the industry and continues to seek out and identify advantageous opportunities, creating very good risk adjusted returns for its investors.