At Village Park of Schaumburg, residents savor an ultra-modern clubhouse with a resort-style swimming pool, racquetball court, exercise room, great room and business center. Inside their apartments, they enjoy contemporary decor and first-class appliances, while outside, they appreciate the handsomely landscaped grounds and distinctive entryway.
You’re thinking this is a brand new apartment community, right? Think again.
If you’ve ever lived in or near Schaumburg, you may know the property better by its former name: New Kensington. A couple of years ago, the 30-year-old community received a new name along with a new and far more modern and appealing identity, thanks to a major renovation by the company that acquired it, Farmington Hills, Michigan-based Village Green Cos.
In the language of the multi-family housing industry, Village Park of Schaumburg has been “repositioned.”
No longer relegated to a “B-minus” grade among apartment communities, it’s earning “B-plus” marks. And its residents are content to pay higher rents, because the property now offers a better standard of living than it did during its earlier life as New Kensington.
What’s more, its hometown of Schaumburg can boast an apartment community that may be three decades old, but offers the look and appeal of a property built within the last few years.
Village Park of Schaumburg isn’t alone. Throughout the Chicago area, at places like Elmhurst Terrace in Elmhurst, Aspen Place in Aurora and Village Park properties in Westmont, Palatine and Carol Stream, older apartment communities are being reborn. That often means new names, amenities, features and, occasionally, a substantially different appearance.
“The trend now is [toward] constructive re-use,” said Judith Roettig, executive vice-president of the Schiller Park-based Chicagoland Apartment Association. “People with vision are looking at properties that may be plain and ordinary, and bringing them back to life by providing good housing, not just ordinary housing.”
The reason for the interest in properties originally built between the 1940s and the 1980s can be summed up in one word: economics.
Diane Batayeh, Village Green Cos.’ senior vice-president of acquisition, says repositioning can be accomplished at 60 percent of the cost of acquiring raw land, taking it through the entitlement process and building from the ground up.
“In today’s climate in Chicago, it’s hard to build any community at a cost of less than $100,000 per unit,” Batayeh said. “And that’s assuming you can find zoned land. When you do find those sites, they tend to be very expensive.”
As a company that has traditionally sought “market width” ? in other words, creating appeal for a wide range of renters ? Village Green has never been interested in targeting apartments only to those able to foot the bill for Class A luxuries, Batayeh said.
So in the late-1980s, a period in which almost all new apartments built were Class A, the company founded its Village Park division, then set out to acquire older properties in its Midwest markets of Chicago, Detroit and Minneapolis.
Once renovated, those properties have been marketed to renters not willing or able to pay for “A,” but able to afford better than “C.”
“What we decided was, let’s try to purchase these older assets in thriving communities where neighborhoods are appreciating,” Batayeh said. “These are in what were once outlying areas, but are now in in-fill locations.”
Once Village Green acquires an older property, the company decides what will be needed to bring about a repositioning. Will roofs and pavements need replacement? What will it take to rehabilitate the units? And what do competing apartment communities offer?
After addressing those issues, the company creates a new entry environment, with new signage and landscaping “so it will read like a new property when people drive by,” Batayeh said.
A new 5,000- to 6,000-square-foot clubhouse is constructed, with a full-size racquetball court, great room, exercise room, conference center and men’s and women’s locker rooms. Outside, a resort-style pool is installed, with an outdoor fireplace, waterfall and spa.
“The key out there is movement, activity and excitement,” Batayeh said. In many cases, a volleyball court, tennis court, children’s play lot and picnic area are also part of the repositioning, along with garages or carports, depending on the market.
“And we spend a huge amount on landscaping,” Batayeh added. “It’s not unusual for us to spend $100,000, or even twice that, for landscaping.”
Village Park of Schaumburg, which had its grand opening earlier this year, is the fourth Village Park community to open in the Chicago area.
The former Westmont Village was transformed into Village Park of Westmont in 1996; Briarwood Lakes became Village Park of Carol Stream in 1997; and Deer Grove was rechristened Village Park of Palatine in 1998. All four of the properties were built in the late 1960s or early 1970s.
“We do position them as above Class C and below Class A,” Batayeh said. “But in many cases, they wind up being competitive with Class A communities, because the amenities we add are Class A amenities. The market winds up telling us, ‘Hey, we think you’re worth more.’ “
Karen Walzel, a resident of Village Park of Carol Stream, has lived in the apartment community under different owners since 1984. She likes the changes that have taken place since Village Green took over and upgraded the property.
“The prior companies never went in and really looked at what the units looked like,” she recalled. “Village Green went into each apartment to do an assessment of what was needed.
“They rehabbed the bathroom, I got all new appliances, new flooring in the bathroom and kitchen, and new carpeting.”
Improvements in the community areas, such as the addition of the clubhouse, pool and spa, have also made a difference, Walzel added.
“When I bring somebody over to spend the afternoon with me at the pool . . . they can see the company’s pride in ownership,” she said.
Much the same kind of pride is in evidence at Elmhurst Terrace in Elmhurst. Built in 1947, the 315-unit community’s best days were long behind it by the time Chicago-based Bayshore Management purchased it in November 1997.
But Bayshore sensed potential for rebirth.
“It was an ugly duckling in a great pond, and we wanted to turn it into a beautiful swan,” said director of marketing Mary Herrold.
One problem was the resident mix, the other the age of the community. Bayshore had to roust a few “rule breakers and bad actors” from their apartments, Herrold said.
But the company faced a more vexing problem in the fact that the community had been built for an entirely different era.
When Elmhurst Terrace was unveiled in the wake of World War II, many families owned no cars, let alone two or more. By the 1990s, the community faced a severe parking shortage, leading to resident turnover.
In addition, the electrical system and plumbing hadn’t been designed to accommodate later generations of appliances, such as air conditioners and dishwashers.
Bayshore added parking and upgraded the electrical and plumbing infrastructure. Then the company gutted and rehabbed every single kitchen, bathroom and hallway. It also built a fitness center and a club room with billiards, a card room and TV viewing area. Community barbecue areas were installed in all the courtyards.
In the process, the property shed its reputation for crime.
“It had been the problem in the community,” Herrold said. “Everyone hated it. The [village] was so thrilled to have us come in and stabilize things, because it was good for Elmhurst.
“Now we’re a cornerstone in the community. The mayor said, ‘Pinch me. I can’t believe it’s the same place.'”
Currently at work repositioning an older North Miami, Fla., apartment community that had come to be called “the Beast on Biscayne,” Bayshore has plans for acquisitions of other older properties in the Chicago area.
Also capturing attention has been the repositioning of Aurora’s Aspen Place by Chicago’s Kensington/Marquette Partners.
Formerly called Terrace Lakes (and dubbed “Terror Lakes” by residents), the 416-unit community was built in 1988 and soon began suffering crime problems as a result of poor resident screening.
Kensington/Marquette, the acquisition arm of Romeoville’s Marquette Management, acquired the property in September 1996, changed its name to Aspen Place, and pumped $1 million into a two-year renovation that resulted in replacement of carpeting, tile, blinds, windows, exterior doors and pavements, as well as repair of roofs, repainting of balconies, and improvements in signage, gutters, landscaping and drainage.
“With the money we put in, we were able to raise rents,” said Marty O’Connell, vice president of acquisition. “You get a better quality tenant because you’re at a point where they’re willing to pay more. Previous management had not done a good job of prequalifying.”
Add Marquette Management’s considerable flair for bringing residents together through pool parties and other community-wide social functions, and the turnaround has been dramatic.
“It’s a nice, clean, safe place to live,” O’Connell said. “People are getting value.”
