Jonathan Rose Cos. acquired Englewood Gardens, an apartment portfolio in Chicago’s Englewood neighborhood, and plans to preserve it all as affordable housing. It’s the latest in a series of Chicago purchases by the New York City-based investor, and company officials say they’ve got the financial heft to both preserve and renovate thousands of local units.
The firm partnered with local development firm 5T Management to acquire the 13-building, 167-unit, scattered-site Section 8 property for $10.7 million from affordable housing developer Anthony Fusco.
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“(Residents) will be excited that someone cares enough about them to invest money in their homes,” said Steve Thomas, director of acquisitions and development for 5T. “That’s what builds communities.”
Jonathan Rose is becoming a big player in Chicago’s affordable housing sector. By the end of the year, it will own more than 2,000 affordable and mixed income apartments in the Chicago area, according to Nathan Taft, partner and senior managing director.
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The company’s goal isn’t just to make a profit. Taft says it attracts investors by promising to also inject needed funds into aging properties to enhance the lives of residents.
“Our goal is to repair the fabric of communities, and that always starts with providing good affordable housing,” said Taft. “In the U.S., it’s pretty shocking that you can go five blocks in one direction and find completely different life outcomes.”
Jonathan Rose bought Englewood Gardens with its $525 million Rose Affordable Housing Preservation Fund V. In a one-year renovation, it will install energy efficient features such as LED lights and better insulated roofs, cutting residents’ utility bills, and add new cabinets and flooring, and make fire and safety improvements.
“Right now, we’re planning to spend up to $1.7 million,” said Thomas. “But we have access to other capital if necessary.”
Fusco is retiring and selling off his entire affordable housing portfolio, much of it to Jonathan Rose, according to Max Jawer, director of acquisitions for Jonathan Rose. In 2020, the company bought Fusco’s Pheasant Run/Hunter, a 176-unit Section 8 community in Orland Hills, followed by its 2021 acquisition of Lake Grove Village, a 458-unit high-rise on the South Side.
In 2022, it bought Archer Courts, a 146-unit Section 8 community in Chinatown, from Fusco for $11.6 million, and later this summer expects to close the purchase of Fusco’s Barbara Jean Wright Court Apartments, a 272-unit, low-rise, Section 8 development at 1354 S. Morgan St. just north of Pilsen. The company also plans to buy Fusco’s 51st and King Dr. Apartments, a 96-unit Section 8 community at 5035 S. King Dr. in the Grand Boulevard neighborhood.
Local officials praised Jonathan Rose for preserving Englewood Gardens, which will be managed by 5T, and making commitments to improve conditions.
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“We want long-time residents to maintain their place in the community, and Rose’s ownership ensures long-term affordability for existing tenants and will provide the extensive renovation that will vastly improve Englewood Gardens and the quality of life for all of its residents,” said South Side Ald. Roderick Sawyer in a statement.
Founded in 1989, Jonathan Rose now owns about 18,000 units nationwide. It has developed or acquired more than $3.2 billion of real estate. Throughout the Chicago area, 5T Management owns or manages more than 1,000 units, including affordable and market-rate housing.
CEO Deona Thomas of 5T Management said the firms’ partnership was a natural one. They’ve known each other for more than a decade, and for years sought to collaborate on mutual goals, including improving communities such as Englewood.
“We want our residents to feel proud of where they live,” she said. “That’s the ultimate goal.”
