Illinois Firm Buying Up East Side Buildings
Fairchild Acquisition buys five apartment buildings in six months, with plans for more.
Fairchild Acquisition is quickly putting down roots in the Milwaukee housing market.
The Deerfield, IL-based firm purchased three apartment buildings between E. North Ave. and E. Locust St. last year and added another two last month. It hopes to add several more by the end of the year.
“It’s a real circle of life for me,” said Grossman in an interview. He grew up in Fox Point before leaving for college in Boston in 1998 and ultimately starting a real estate career in Chicago. “I was always drawn to Milwaukee, but it didn’t make sense from a business standpoint.”
Milwaukee’s time has now come.
His firm first acquired and renovated a series of apartment buildings in Chicago’s Edgewater neighborhood. He said Fairchild was drawn to the neighborhood because of its proximity to The Loop, Chicago’s central business district, and the demand generators nearby, including Loyola University.
“When we started talking with my business partners about where the next place was, Milwaukee was always first on my list,” said Grossman. After considering 12 submarkets in Milwaukee, Fairchild settled on the area between E. North Ave. and UW-Milwaukee. “It really meshed with our business plan in Edgewater. It was landlocked geographically by a university, the lake, suburbs to the north and Downtown to the south.”
“I love that I’m back where my roots are,” said Grossman, 40, as he ticked off a list of past memories including spending time at the Coffee Trader cafe, BBC bar, Benji’s Deli and his bar mitzvah at what is now UWM’s Helene Zelazo Center. His grandfather started Zien Plumbing and Heating.
The firm modernizes the interior of the aging properties, giving them “condo-style” finishes, and markets them primarily to non-student residents.
“In no stretch of the imagination are we in student housing,” said Grossman. He said the firm’s 160 units near the Loyola University campus in Chicago have only three students as renters currently.
“We see the same thing happening in [Milwaukee],” said Grossman. “We are not looking for a different renter every single year. We want someone that is committed to the community.”
“We believe in creating value in buildings by modernizing the interiors, while maintaining the historic look of the exterior and the balance goes along with it,” he said. Improvements include new electrical service, plumbing, flooring and cabinets. “We convert unused basement space to fitness and business centers.”
All of the buildings it has purchased in Milwaukee so far are more than 100 years old.
Grossman said the firm’s strategy is to buy and hold the buildings. “Are we fix and flippers? No,” said the investor. “We want to grow with Loyola. We want to grow with UWM.”
Grossman said the firm has 40 units under contract for purchase in May.
Fairchild is working with Milwaukee broker Nathan Glaisner on finding the properties. “The word has been put out on the street,” said Grossman.
He describes the firm’s investors as family, friends and high net-worth individuals. The size of the buildings, he said, does not lend itself to institutional investors.
Fairchild hopes to purchase 100 more units worth of properties by the end of the year. “That’s how my business is,” Grossman notes. “You strike when the iron’s hot.”