Situated along Lake Michigan, Rogers Park sits just 7 miles outside the heart of the Loop. Bounded by Ridge Boulevard to the west and the lake to the east, the neighborhood has been a hidden gem for decades, until now.
The hub of the neighborhood has always been Loyola University Chicago, a private Jesuit university known for it's liberal arts, sciences, and being a Top 100 University. In the early 1990s, Rogers Park had a high crime rate compared to neighboring communities like Evanston, however, since the early 2000s, Loyola University has worked with local officials and the community to help reduce crime, encourage business and retail growth and spur new housing developments.
Projects in Rogers Park include:
- $20M renovation of the Loyola Red Line CTA station; the project was funded by Loyola University & the Federal Transit Authority
- The Morgan @ Loyola Station- A partnership between Loyola University & McCaffery Interests to build the first LEED-NC Certified mixed-use building in Rogers Park
- Albion @ Loyola Station- A new construction rental development by Loyola which set the market rate for rent at almost $2/square foot.
- 6900 N Sheridan- A boutique luxury apartment building which for a lack of better explanation will blow your mind
- Loyola's $58M Institute of Environmental Sustainability Centre which includes a greenhouse, a water recycling system using rainwater, geothermal system using glass panels & large tanks for aquaponics.
- A proposed Hampton Inn hotel near the new Loyola Red Line Station with a retail component
In 2014, Rogers Park saw about a 5% increase in rents for updated units; Chicago as a whole saw a 2.9% increase according to Zillow. We also believe these increased rents in Rogers Park are sustainable for a few reasons:
- Loyola is a large support system to the community and we see many parallels to University of Chicago & Hyde Park
- Retailers and restaurants are beginning to move into the area
- Whole Foods & Starbucks are opening their 1st and 2nd locations in Rogers Park
- LA Fitness & Walgreens built a new commercial space 3 blocks south of Rogers Park
- 3 proposed new developments have crossed Alderman Joe Moore's desk for mixed-use developments (http://www.dnainfo.com/chicago/20150122/rogers-park/third-devon-avenue-development-proposed-three-block-stretch)
The Multifamily Market
A short drive through Rogers Park and one will see the beautiful 2-4 unit apartment buildings, the large courtyard buildings, as well some magnificant single family home scattered throughout tree-lined streets. Many of these buildings have been kept in families for generations because they, like us, knew that the rental market would remain vibrant for years to come. The centrality of Loyola University is the core, and they don't have plans to go anywhere, especially with all their expansions. Having prefaced with this, investors will see there is a premium for multifamily properties in Rogers Park; apartment quality buildings are trading in the low to mid 6's, while condo-quality rehabbed buildings are trading in the mid 5's. So what is the game plan?
The opportunity comes into either buying finished products for long term appreciation, as we see this being the next million dollar neighborhood in Chicago,plus steady cash flow. The other, more laborious option is purchasing a apartment quality building and putting capital into the building to lower the building expenses and raise rents. By running individual heating to units, replacing water tanks with high efficiency ones, and having tenants pay their own electric and gas, building owners can lower their annual operating expense by as much as 25%. This is crucial in older buildings such as the ones found in Rogers Park.
As Loyola continues to be on the forefront of developing a sustainable, business and family friendly neighborhood, we encourage investors who are looking for those relatively "safe" assets in Evanston to venture just a few blocks along the lake; you just might be surprised by what you may find.