Highland buys Magellan's 298-unit River North tower for $119M
When buying beats building, the math bends toward existing towers, and Chicago's supply drought makes them scarce.
Utah-based Highland Partners has paid $119 million, or about $399,000 a unit, for Exhibit on Superior, a 298-unit River North tower, buying from developer Magellan Development in its largest Chicago multifamily acquisition to date.
Why it matters
The deal captures the trade every apartment investor is running right now: buy versus build. With construction costs elevated and Chicago’s rental supply historically tight, acquiring a stabilized 2017 tower below what it would cost to build one is the safer path to yield. Chicago delivered just 370 units in 2025 against 1,700 absorbed, pushing vacancy to 5.1 percent and generating the nation’s highest rent growth at 5.4 percent through year-end, per JLL. That scarcity is exactly what makes existing towers valuable and new ground-up deals hard to pencil. For developers, the signal is that capital is rotating toward acquisitions in supply-starved gateway and Midwest markets.
The numbers
The 34-story tower at 165 West Superior Street was completed in 2017 and was 95 percent leased at an average rent of $2,700 when listed in 2023, all units at market rate. Magellan had refinanced it for $113 million in 2021. On the economics of buying in, Highland’s Ben Frazer said the price “is less than it would cost to replace the building today.”
What’s next
Watch whether Highland keeps buying in Chicago, as stated, and whether more institutional capital chases the market’s supply-driven rent growth. More at the Chicago market hub and our multifamily coverage.