Learn Hardcore Japanese: eki no tikaku ni apaato ga arimasu. - There is an apartment near the station.

の connects nouns and shows a relationship between them. In 駅の近く, 駅 means station and 近く means nearby area / vicinity. So 駅の近く literally means the area near the station.

You can think of it as:

駅 = station
近く = neighborhood / vicinity / nearby place
駅の近く = the vicinity of the station

So の is not possession here in the strong English sense; it is just linking the two nouns.

What part of speech is 近く here?

Here, 近く is being used as a noun, not as an adjective.

That is important because beginners often learn 近い first, which is the i-adjective meaning close. But in this sentence, Japanese uses the noun form 近く, meaning nearby place or vicinity.

Compare:

駅の近く = near the station / the area near the station
駅に近いアパート = an apartment that is close to the station

So in your sentence, 近く is a noun phrase location.

Why is に used after 駅の近く?