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Author: Mark Ainely | Partner GC Realty & Development & Co-Host Straight Up Chicago Investor Podcast
What does it take to go from leasing Chicago apartments to developing hundreds of new rental units?
Andy Ahitow started his real estate career showing apartments in Chicago. He eventually built Chicago Apartment Finders into a leasing business that rented approximately 65,000 apartments over 13 years. Today, through CityPads, he's focused on something different: creating new housing in neighborhoods where people want to live.
But building apartments in Chicago comes with challenges that have nothing to do with finding tenants.
Andy has dealt with distressed condo conversions, major construction surprises, tenant relocation expenses, complicated financing, and development approvals that reduced the number of apartments he could build. His redevelopment of the Wilson Men's Hotel in Uptown is a perfect example of how quickly a promising project can become a test of patience and capital.
In this episode of the Straight Up Chicago Investor Podcast, Tom Shallcross and Mark Ainley sit down with Andy to discuss his transition from apartment leasing to multifamily development, the creation of CityPads, and what he's learned about building rental housing in Chicago.
Andy explains why smaller apartments can make sense in strong locations, which amenities renters actually care about, and how Chicago's zoning process affects housing development. He also discusses his growing interest in Evanston and the differences he's experienced developing in Los Angeles.
Whether you own a Chicago two-flat, manage a multifamily portfolio, or want to develop your first apartment building, this episode offers lessons about rental demand, construction risk, property operations, and long-term investing.
Questions We Answer in This Episode
Q: How did Andy Ahitow get started in Chicago real estate?
A: Andy began leasing apartments in 2001 at The Apartment People. He eventually started Chicago Apartment Finders, opening a storefront on Belmont Avenue and using Craigslist and online marketing to attract renters. The business grew rapidly, leasing approximately 1,000 apartments in 2003, 3,000 in 2004, and 4,500 in 2005.
Q: How did Chicago Apartment Finders become such a successful leasing business?
A: Andy focused on making apartment searches easier for renters and leasing agents. His company maintained relationships with landlords and property managers throughout Chicago, allowing agents to show several apartments in one outing. He also recognized the importance of online search early. Over approximately 13 years, Chicago Apartment Finders leased around 65,000 apartments.
Q: How did Andy transition from apartment leasing into multifamily investing?
A: The 2008 financial crisis created opportunities to acquire distressed Chicago apartment buildings and failed condominium conversions. Andy partnered with investors who had capital and underwriting experience while his team handled leasing, renovations, and property operations. His first major project was a vacant 32-unit building in Rogers Park near Morse and Oakley. Between 2009 and 2014, the partnership assembled nearly 1,400 apartment units.
Q: What did Andy learn from redeveloping the Wilson Men's Hotel in Uptown?
A: The project taught him how unpredictable older-building renovations can become. CityPads acquired the property in 2017 with plans to convert approximately 254 cubicle-style rooms into micro-studio apartments. Tenant relocation cost approximately $500,000, an unexpected elevator replacement added roughly another $500,000, and significant roof and masonry repairs increased the budget. The project also faced community concerns, financing challenges, and a difficult opening during the pandemic. Andy says the property eventually stabilized and began generating positive cash flow.
Q: Why did Andy sell Chicago Apartment Finders and start CityPads?
A: Coldwell Banker approached Andy about acquiring Chicago Apartment Finders in 2014, and the sale closed in 2015. Although the leasing business had grown substantially, Andy wanted to focus on owning and developing real estate. He launched CityPads in March 2015 and began with smaller projects, including properties in Oak Park, Wicker Park, and Pilsen, before pursuing larger apartment developments.
Q: Why does CityPads focus on smaller apartments in desirable neighborhoods?
A: Andy believes renters frequently prioritize location, affordability, and convenience over square footage. CityPads designs efficient apartments near public transportation, restaurants, shopping, and entertainment. He discusses two-bedroom layouts as small as approximately 670 square feet. Smaller, well-designed apartments can keep total monthly rents more accessible while producing strong rental revenue per square foot.
Q: Which apartment amenities does Andy believe renters value most?
A: Andy considers the neighborhood itself one of the most important amenities. Inside apartments, he prioritizes in-unit laundry, air conditioning, dishwashers, and practical storage. For common areas, he sees value in co-working spaces, outdoor areas, and appropriately sized fitness facilities. At a 230-unit Evanston project, CityPads planned multiple shared amenities within approximately 3,500 square feet rather than dedicating excessive space to features residents might rarely use.
Q: What apartment renovation decisions can Chicago landlords learn from Andy?
A: Andy emphasizes improvements that renters notice without creating unnecessary maintenance expenses. These include glass shower doors, tile extending to the ceiling, convenient shower shelves, functional cabinets, and smart locks. He also explains why CityPads generally avoids garbage disposals because they can cause maintenance problems. The lesson is to evaluate upgrades based on renter appeal, durability, and long-term operating costs.
Q: How does Chicago zoning affect multifamily development?
A: Andy believes zoning restrictions and approval requirements make it harder to create new housing. At The Edge on Broadway in Edgewater, CityPads initially proposed approximately 180 apartments but ultimately developed 105. He describes how parking requirements and the local approval process influenced the final project. Andy contrasts that experience with a proposed 144-unit Los Angeles development that received key administrative approvals in approximately four months.
Q: Where does Andy see future real estate development opportunities?
A: Andy is particularly optimistic about Evanston. After developing Tapestry Station, CityPads pursued additional projects in the area, including a 230-unit building under construction at the time of the interview. He also discusses opportunities in Chicago and Los Angeles. CityPads had approximately 700 units in development and another 700 in its pipeline. Despite working on larger projects, Andy advises beginning investors to focus on strong locations, understand their numbers, and prioritize realistic positive cash flow.
Show Notes and Timestamps
01:23 Housing Provider Tip of the Week: Why a clogged toilet can require an emergency maintenance response.
02:22 Andy's introduction to Chicago real estate and the early growth of Chicago Apartment Finders.
08:20 Leasing approximately 65,000 Chicago apartments and building a successful leasing operation.
09:33 How the 2008 financial crisis created opportunities to acquire distressed multifamily properties.
12:30 Growing a Chicago apartment portfolio to nearly 1,400 units through acquisitions and renovations.
18:08 Redeveloping the Wilson Men's Hotel in Uptown and dealing with unexpected construction and relocation expenses.
25:50 Selling Chicago Apartment Finders to Coldwell Banker and launching CityPads.
32:19 Developing smaller apartments and the success of The Edge on Broadway in Edgewater.
36:21 Apartment layouts, amenities, in-unit features, and renovation decisions that influence renter demand.
44:00 Chicago housing supply, zoning restrictions, Evanston development opportunities, and expansion into Los Angeles.
Key Takeaways for Chicago Landlords and Investors
Leasing experience provides valuable market knowledge. Andy's years of showing Chicago apartments helped him understand renter preferences before becoming a developer.
Strong partnerships can accelerate portfolio growth. Andy combined his leasing expertise with partners who understood financing, underwriting, and construction.
Distressed properties require careful due diligence. Older buildings may offer attractive acquisition prices, but hidden construction problems can dramatically change the investment.
Tenant relocation can become a significant development expense. The Wilson Men's Hotel redevelopment demonstrates why investors need to understand occupancy, relocation obligations, and potential delays before purchasing a property.
Location can matter more than apartment size. Efficient apartments in walkable neighborhoods may appeal to renters who prioritize convenience and manageable monthly rent.
Avoid spending heavily on amenities that tenants rarely use. Shared spaces should provide real value without consuming excessive rentable square footage.
Practical apartment features influence leasing decisions. In-unit laundry, air conditioning, dishwashers, storage, and functional layouts are important for the renters CityPads targets.
Renovations should account for long-term maintenance. Smart locks and durable finishes may improve operations, while certain features can introduce avoidable repair expenses.
Vacancy reduction starts with understanding renter demand. Andy's leasing background shows why apartment marketing, pricing, and efficient showings are essential to rental property performance.
Zoning can significantly affect development economics. Permitted density, parking requirements, and approval timelines should be researched before acquiring a development site.
Chicago investors should evaluate Evanston opportunities carefully. Andy's growing development activity there reflects his confidence in the area's rental demand and development potential.
Persistence is essential in real estate development. Financing obstacles, unexpected repairs, and approval delays are common challenges that require patience and adequate reserves.
Positive cash flow remains a critical investment consideration. Even while developing large apartment buildings, Andy emphasizes strong locations and financial fundamentals.
Guest info
Guest Name: Andy Ahitow
Guest Company: City Pads
Guest Link: https://www.citypadsre.com/
Because finding good tenants and property management shouldn’t feel like online dating.
Dear Investor,
If you are an investor in either the city or suburbs of Chicago, I would love to speak with you about how we can help you on your real estate journey. At GC Realty & Development LLC, we help hundreds of Chicagoland real estate owners and brokers each year manage their assets with both full service property management and tenant placement services.
We understand that every investor’s goals are unique, and we love learning about each client’s individual needs. If there is an opportunity to help you buy back your time by managing your rental property or finding quality tenants, please check us out.
Best Investing,
Founder, Partner, Podcast Co-Host, and Investor
