S2 Capital Expands Its Footprint by Acquiring Ovaltine Apartments in Chicago Area
S2 Capital, a prominent real estate investment management firm based in Dallas, has successfully acquired the Ovaltine Apartments, a significant property located in Villa Park, Illinois. This acquisition is noted as their first venture into the Greater Chicago area, marking a strategic expansion for the company. The multifamily community features 344 units characterized by a garden and loft-style design that is both distinctive and appealing to renters looking for unique living spaces.
The Ovaltine Apartments hold a rich history, initially serving as the Ovaltine Chocolate Factory before undergoing conversion in 2001. The property stands out with its impressive design, offering layouts that include ceiling heights ranging from 9 to 15 feet, showcasing architectural features seldom seen in suburban Chicago. The location benefits from being in DuPage County, a submarket where new multifamily units are scarce, positioning this property to capture current market demand.
This strategic investment aligns with S2 Capital’s value-add investment strategy, a methodical approach that emphasizes enhancing property value and tenant experiences. Cole Stephens, the Managing Director of Asset Management for Residential at S2 Capital, noted that entering the Chicago market was a decision backed by extensive research and an understanding of long-term demand fundamentals. "Ovaltine offers a compelling combination of historical character, durable demand drivers, and value-creation potential," said Stephens, emphasizing the property's appeal and investment merit.
Performance-wise, Ovaltine Apartments has demonstrated robust metrics, particularly maintaining an occupancy rate above 95% since January 2024. Additionally, the property has consistently outperformed other comparable units in the area in terms of rent growth. Currently, approximately 98% of the units have not undergone renovations or have only seen partial upgrades. This presents a substantial opportunity for S2 Capital to implement a comprehensive renovation program. Such upgrades are expected not only to enhance the living experience for tenants but also to fuel further rental growth in line with the community’s historic charm.
Acquiring the Ovaltine Apartments was facilitated through S2 Capital’s fully discretionary, closed-end fund, known as S2 Real Estate Fund II. The firm plans to leverage its vertically integrated operating model to conduct interior enhancements, make targeted capital improvements, and drive operational efficiencies throughout the investment horizon. Established in 2012, S2 Capital has developed a strong reputation in the real estate market, specializing in both residential and industrial opportunities across various investment strategies, including opportunistic, value-add, credit, and core-plus strategies. With over 51,000 units acquired and $13 billion in total capitalization transacted since its inception, S2 shows a steady commitment to investing strategically in communities while creating long-term value at every stage of the real estate lifecycle.
As S2 Capital embarks on this new chapter in the Chicago market, the Ovaltine Apartments acquisition is not just an investment but a testament to the firm's growth and expansion ambitions within the U.S. real estate landscape. The focus on enhancing a property with such rich historical roots symbolizes S2's dedication to preserving community character while meeting modern living demands, a dual approach that underscores the firm’s long-term vision for success.
The Ovaltine Apartments hold a rich history, initially serving as the Ovaltine Chocolate Factory before undergoing conversion in 2001. The property stands out with its impressive design, offering layouts that include ceiling heights ranging from 9 to 15 feet, showcasing architectural features seldom seen in suburban Chicago. The location benefits from being in DuPage County, a submarket where new multifamily units are scarce, positioning this property to capture current market demand.
This strategic investment aligns with S2 Capital’s value-add investment strategy, a methodical approach that emphasizes enhancing property value and tenant experiences. Cole Stephens, the Managing Director of Asset Management for Residential at S2 Capital, noted that entering the Chicago market was a decision backed by extensive research and an understanding of long-term demand fundamentals. "Ovaltine offers a compelling combination of historical character, durable demand drivers, and value-creation potential," said Stephens, emphasizing the property's appeal and investment merit.
Performance-wise, Ovaltine Apartments has demonstrated robust metrics, particularly maintaining an occupancy rate above 95% since January 2024. Additionally, the property has consistently outperformed other comparable units in the area in terms of rent growth. Currently, approximately 98% of the units have not undergone renovations or have only seen partial upgrades. This presents a substantial opportunity for S2 Capital to implement a comprehensive renovation program. Such upgrades are expected not only to enhance the living experience for tenants but also to fuel further rental growth in line with the community’s historic charm.
Acquiring the Ovaltine Apartments was facilitated through S2 Capital’s fully discretionary, closed-end fund, known as S2 Real Estate Fund II. The firm plans to leverage its vertically integrated operating model to conduct interior enhancements, make targeted capital improvements, and drive operational efficiencies throughout the investment horizon. Established in 2012, S2 Capital has developed a strong reputation in the real estate market, specializing in both residential and industrial opportunities across various investment strategies, including opportunistic, value-add, credit, and core-plus strategies. With over 51,000 units acquired and $13 billion in total capitalization transacted since its inception, S2 shows a steady commitment to investing strategically in communities while creating long-term value at every stage of the real estate lifecycle.
As S2 Capital embarks on this new chapter in the Chicago market, the Ovaltine Apartments acquisition is not just an investment but a testament to the firm's growth and expansion ambitions within the U.S. real estate landscape. The focus on enhancing a property with such rich historical roots symbolizes S2's dedication to preserving community character while meeting modern living demands, a dual approach that underscores the firm’s long-term vision for success.
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