S2 Capital has made its first investment in the Chicago metro with the acquisition of Ovaltine Apartments in Villa Park, a western suburb. Terms of the transaction were not disclosed.
Following several years of evaluation and underwriting across the metro, the acquisition represents a strategic expansion for the Dallas-based real estate investment manager into a new major U.S. market.
“All markets are not created equal, and our entry into Chicago reflects years of disciplined research and conviction around long-term fundamentals,” said Cole Stephens, managing director of asset management, residential. “Ovaltine offers a compelling combination of historic character, durable demand drivers, and value creation potential, making it an exciting first investment for S2 in the Chicago market and a strong addition to our portfolio.
S2 acquired the property through its fully discretionary closed-end fund, S2 Real Estate Fund II, as part of a competitive marketing process led by the JLL Investment Sales team. The acquisition also aligns with S2’s value-add investment strategy. Approximately 98% of the units remain unrenovated or partially upgraded; S2 has plans to leverage its vertically integrated operating platform to implement interior renovations, capital improvements, and operational efficiencies.
The 344-unit Ovaltine Apartments, a garden- and loft-style community originally converted from the historic Ovaltine Chocolate Factory in 2001, features distinctive layouts, high ceilings, and unique architectural detail. It’s located in DuPage County, a supply-constrained submarket with no new multifamily units under construction within a 3-mile radius and recent strong rent growth. In addition, the property has maintained average occupancy above 95% since January 2024.
Chicagoland has emerged as a top apartment market. RentCafe ranked Chicago and its suburbs as the second and third hottest apartment markets in the nation in 2025. Even though the suburbs had a 1.1% bump in new supply this year, it hasn’t been enough to meet the demand. The suburbs have seen an occupancy rate of 95.5% and a lease renewal rate of 70.3%.
Since its inception in 2012, S2 has acquired over 51,000 units nationwide and transaction over $13 billion in total capitalization.