by Dan Rafter
The Vail Davis building has stood in the Chicago suburb of Arlington Heights since 1928, its distinctive castle tower a familiar sight in the suburb’s downtown.
During its long life, the building has housed a variety of businesses, serving as a home for a fish market, druggist, barber, pool hall and even the Hertzog cigar factory, makers of the hand-rolled Gander Cigar. t
Today, the building is taking on a new role: The Chicago-based real estate firm CF Real Estate and 33, the parent company of Cubed Construction, have created 16 luxury rental apartments here. Two restaurants continue to operate in the ground floor of the property.
CF Real Estate and 33 acquired the property in June of 2014 for $2.55 million. Eric Weber, founder of Cubed Construction and principal of 33, said that he considers himself lucky to be involved in this renovation project. The Vail Davis building sits next to Arlington Heights’ train station, and its location in the suburb’s downtown makes it attractive to renters interested in living the suburban-urban lifestyle. Residents here can walk to restaurants, shops and public transportation.
“It’s better to be lucky than good, sometimes,” Weber said. “The property was being marketed quietly by Kiser Group. People had looked at it and passed on it. CF Real Estate looks for value and opportunities. We have typically been focused on the city. But we couldn’t pass up this opportunity.”
Opportunity and challenges
The Vail Davis building had the right demographics and location, Weber said. But that didn’t mean that the decision to purchase the building was an easy one.
The building has no parking and no doorman. The building itself was in disarray when CF Real Estate and 33 bought it.
But, that location sealed the deal, Weber said.
“There was something about its look, its location in a bustling spot that spoke to us,” Weber said. “We had been moving our strategy more toward the suburbs. We took a jump at it.”
The risk has paid off, with the renovated building attracting renters who are more interested in location, proximity to public transportation and an urban feel than they are by pools, doormen or on-site workout facilities, amenities that the Vail Davis building still doesn’t feature.
Cubed Construction handled the renovation. The work included a total rehab of all the rental units, the installation of high-efficiency HVAC systems and upgrades to the building’s plumbing and electrical systems. Cubed also installed luxury finishes, including chef’s kitchens and high-end bathrooms.
The renovation cost $1.4 million, and were completed in early November of last year.
Tim Gallagher, development operations manager with 33, said that his company is happy to have made a difference in Arlington Heights with this project, bringing new life to a historic building that had grown tired over the years.
“The building has a fascinating history,” Gallagher said. “One of its original owners, Herman Redeker of the Vail-Davis Corporation, called it his biggest venture and biggest loss.”
Redeker and his partners completed the building in 1929. They owed $1,500 in interest at that time. The money was in the bank, but the bank closed because of the crash in the stock market. Redeker and his partners, then, lost the property.
Weber said that CF Real Estate and 33 didn’t have to add amenities to the building to make it attractive to renters.
“We toyed with the idea of adding a rooftop deck space, but we decided against it,” Weber said. “The property doesn’t really need a doorman. We took a gamble on it. It came down to the finish qualities and the location. That allowed us to compete with the buildings in Arlington Heights that did have a doorman, office centers and pools. We are a 16-unit walk-up building with a turret in the middle. That is what we had to sell people on, and it has worked for us.”
Weber said that the renters at the building come from diverse groups. Some are middle-age professionals with no children. Others are transplants from Chicago who wanted to move to the suburbs but still wanted a more urban feel.
But the tenants all have one thing in common: They are not bothered by the lack of office centers, fitness rooms or pools.
“You can walk across the street and get on the train,” Weber said. “That is the important amenity.”