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    1040 W. 87th St Chicago, IL 60620

    Sponsored
    For Sale
    $1,850,000

    Chicago multifamily investment opportunity; strong cash flow.

    Property size:
    22,380 SF

    Description

    Added:
    Jan 16, 2025
    Days on Market:
    364
    This exceptional 32-unit courtyard building, located at 1040 W. 87th St in Chicago's Auburn Gresham community, presents a compelling investment opportunity. The property boasts 26 one-bedroom/one-bathroom units and 6 studio apartments, all featuring spacious layouts and abundant natural light. Situated on 87th Street, it enjoys a prime location just three blocks from the Gresham Metra Station and is conveniently close to CTA public transportation. Recent capital improvements significantly enhance the property's value and operational efficiency. These include a modern Peerless Boiler with an R&D control system, a newer hot water boiler and tank, a code-compliant porch, and a newer roof. The building currently offers a stabilized, cash-flowing asset with an 8% cap rate and a 9.42% cash-on-cash return. A significant value-add opportunity exists through improved leasing and bringing rents to current market rates, with potential for a 40% increase based on comparable properties. The property sits on a 0.51-acre lot and totals 22,380 square feet. This well-maintained building provides a strong tenant base and immediate cash flow, making it an attractive investment for discerning buyers seeking a stable and potentially high-return asset in a desirable Chicago neighborhood. The building's strong fundamentals and potential for increased profitability make it an ideal addition to any investment portfolio.

    Property Features for 1040 W. 87th St

    General Information

    Property type
    Multifamily properties
    Square Feet
    22,380 SF
    Price / Square Foot
    $82
    Elevators
    N/A
    Lot Size
    22,380 SF

    Building Details

    Year Built
    1930

    HighLights

    • 32‑unit courtyard building in Chicago's Auburn Gresham neighborhood.
    • Conveniently located near public transportation, including the Gresham Metra Station.
    • Features a modern Peerless boiler with R&D control system and a newer roof.
    Location Intelligence

    Current Use by Public Records

    Extra Space Storage Self-Storage Facility

    Suggested Use

    Realty agency Law Firm Restaurant Spa & Massage Dental Office Hair Salon Nail Salon Clothing Store Building Supply Gym & Fitness

    Zoning and permitted uses should be independently verified with local authorities.

    Location Insight

    • Map
    • Local Demand
    City
    Chicago
    State
    Illinois
    Longitude
    -87.598265
    Latitude
    41.737675

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    FAQs

    What type of property is this?
    Multifamily property - Chicago multifamily investment opportunity; strong cash flow.
    Where is this multifamily property located?
    The property is located at 1040 W. 87th St Chicago, IL.
    What is the asking price?
    The asking price for this property is $1,850,000.
    What are key features of this property?
    This property features: 32-unit courtyard building in Chicago's Auburn Gresham neighborhood.; Conveniently located near public transportation, including the Gresham Metra Station.; Features a modern Peerless boiler with R&D control system and a newer roof.
    (630) 209-3622
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    1040 W. 87th St Chicago, IL 60620
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    Realmo Value Estimations

    Realmo estimates a property’s market value using a proprietary methodology that incorporates public data and user-submitted information. This cumulative value is generated by integrating a variety of conventional and innovative methods. 

    Disclaimer

    These figures are not official appraisals and should not be used as a substitute for a valuation performed by a licensed appraiser.
    Actual market value may differ due to factors not captured in the data. Estimates are offered for informational purposes only, and users should conduct independent research before making financial or investment decisions.
    By using this feature, you acknowledge that Realmo is not responsible for actions taken based on these estimates.

    AI approach

    Realmo AI Method estimates property value using machine learning models trained on millions of comparable listings, transactions, and market signals. It analyzes property features, location intelligence data, and current market dynamics to predict the most probable market value in real time.

    Realmo CapRate Calculation

    Realmo calculates the Capitalization Rate (Cap Rate) to help estimate a property's potential return on investment. The Cap Rate is a fundamental metric in commercial real estate that measures the relationship between a property's net operating income and its market value.

    How We Calculate Cap Rate

    Cap Rate Formula:
    Cap Rate (%) = (Net Operating Income / Property Value) × 100

    Net Operating Income (NOI) Formula:
    NOI = Area × Lease Rate × (1 - Vacancy Rate) × (1 - Operating Expense Ratio)

    Components

    Net Operating Income (NOI) represents the annual income a property generates after operating expenses:

    • Area: Building square footage from property records
    • Lease Rate: Annual $/sqft based on market data for the property type and geographic location
    • Vacancy Rate: Percentage of unoccupied space based on market data for the property type and location
    • Operating Expense Ratio: Operating costs as a percentage of income, varies by property type

    Property Value is derived from:

    • Recent sale price (if available)
    • Statistical models using comparable sales
    • AI-powered valuation estimates

    Example Calculation

    For a 100,000 sqft Office Building:

    • Lease Rate: $25.00/sqft/year (market data for Office in this area)
    • Vacancy Rate: 8% (market data for Office in this area)
    • Operating Expense Ratio: 35% (typical for Office properties)
    • Property Value: $15,000,000

    Step 1: Calculate NOI

    NOI = 100,000 × $25.00 × (1 - 0.08) × (1 - 0.35)
    NOI = 100,000 × $25.00 × 0.92 × 0.65
    NOI = $1,495,000/year

    Step 2: Calculate Cap Rate

    Cap Rate = ($1,495,000 / $15,000,000) × 100
    Cap Rate = 9.97%

    Property Type Considerations

    Net Operating Income calculations vary by property type due to different operating expense ratios:

    • Office: Higher expenses (30-40%) for HVAC, utilities, maintenance
    • Retail: Moderate expenses (25-35%) for common area maintenance
    • Industrial/Warehouse: Lower expenses (15-25%) for minimal tenant services
    • Multifamily: Moderate expenses (35-45%) including property management
    • Self-Storage: Lower expenses (25-35%) due to minimal maintenance

    Market lease rates and vacancy rates are specific to each property type and geographic location, reflecting local market conditions.

    Disclaimer

    These calculations are estimates for informational purposes only and should not be used as a substitute for professional financial analysis or appraisal.

    • Cap Rate calculations depend on market data that may change over time
    • Actual operating expenses, lease rates, and vacancy rates may differ from market averages
    • Individual property conditions, lease terms, and tenant quality significantly impact actual NOI
    • Property value estimates are approximations and not official appraisals
    • Cap rates vary widely by market, property condition, and investment risk profile

    Professional Guidance Recommended: Before making any investment or financial decisions, consult with licensed appraisers, commercial real estate brokers, and financial advisors who can evaluate your specific property and circumstances.
    By using this feature, you acknowledge that Realmo is not responsible for investment decisions or actions taken based on these estimates.

    Cap approach

    Capitalization Method calculates value based on estimated net operating income (NOI) and applying a market-based capitalization rate (cap rate), we estimate what a typical investor might be willing to pay for it.

    Comparable approach

    Comparable estimate is based on recent sales of similar nearby properties, adjusted for factors like size, condition, and location.

    Relative

    Relative property class coefficient uses factors that account for typical price differences between various asset types (e.g., retail vs. industrial) to provide a more accurate market-aligned estimate.

    Geo

    Comparable Sales Method, enhanced by Geo coefficients — location-based adjustment factors that reflect differences in price levels across neighborhoods, cities, or regions ensuring a more accurate, market-sensitive valuation.

    Alternative use

    Estimate considers the property’s potential value if used for a different purpose-based on zoning, demand, and market feasibility.

    More about this property
    1040 W. 87th St Chicago, IL 60620
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