This Week's Chicago Deal Sheet
Low interest rates on multifamily loans, especially from Freddie, Fannie and FHA/HUD have been a hallmark of 2014, and they’ll likely continue into next year, Berkadia SVP Len Deering tells us.
Len, snapped with Berkadia SVP Tom Sigrist and VP Paul Matusiak, says agency lenders can provide more competitive rates thanks to their government backing, which allow owners of well-located, quality assets the ability to keep up property maintenance without forcing large rent increases. For example, Len and Berkadia AVP Keith Millikan (on behalf of borrower TLC Management) just arranged $7.3M through Freddie Mac for 103-unit, 99% occupied Beachwalk Apartments (below), located at 420 W Fullerton in Lincoln Park. Used to refi existing debt, the five-year, fixed-rate financing bears a 3.07% interest rate and 30-year amortization schedule.
Apartment owners should be wary of the potential for new target interest rates from the Fed, which may start to occur later in 2015, Len says. He’ll also be carefully watching Chicago’s supply/demand balance, with so many new apartment projects planned and under construction both downtown and in the neighborhoods. One sure thing on the demand front is the tech firms, he says, which continue to open offices downtown. (And believe it or not, the programmers don’t sleep under their desks.)
NelsonHill principals Mark and Michael Nelson repped the seller, New York-based Cab Co, in the $2.8M sale of 5353 W Armstrong Ave (above) in Jefferson Park to the Chicago Transit Authority (CTA). JLL’s Hugh Murphy repped the CTA. The 100k SF property sits on 3.75 acres and the CTA will use it to expand its area bus depot.
Hilco Real Estate’s John Tschantz, Joel Schneider and Steve Madura repped the seller, IPC International Realty, in the $4.2M sale ($115-plus/SF) of Bannockburn Lake Office Plaza Complex, a Class-A office building off Route 22 and Waukegan in Bannockburn. The buyer, Great Lakes Credit Union, was repped by Callahan Blandings Schaper’s Nicholas Nicketakis.
@properties Commercial senior investment real estate adviser Kevin Rocio repped the seller, a private entity, in the $1.3M sale of a 13-unit condo building at 6700 S Clyde Ave in South Shore. At a 9.1% cap rate, that’s the highest price/unit for a multifamily property in South Shore this year, according to CoStar. Spyglass Realty Partners’ Brad Schlaak repped the buyer, an LA-based private investor.
Less than 60 days after opening to residents, The Scott Residences (above), a new 71-unit luxury rental mid-rise at the corner of North Wells and West Scott in Old Town, is more than 60% leased. On-site management and leasing is overseen by RMK Management Corp. Building amenities include a resident club lounge (kitchen, fitness center, billiards parlor, etc.), and street-level retail includes Starbucks and Massage Envy.
Cadence Health leased 55k SF at 4525 Weaver Pkwy in Warrenville from Globe Corp. The site's adjacent to the Cadence Proton Cancer Treatment Center. CBRE’s Gary Fazzio repped Cadence Health, and CBRE’s Pete Adamo and David Justh repped Globe Corp.
JBS Commercial Real Estate partners Jason Shibata and Brian Silverman recently took 710-854 Foster Ave in Bensenville, a 115k SF warehouse/flex building, from 67% to 100% leased in four months. The pair also recently repped ownership in the following leases: American Landmark Properties leased 5,300 SF of warehouse space to Xpedite Logistics (repped by GC Realty’s Brad Bullington) at 1474 S Elmhurst Rd in Elk Grove Village; Rothbart Realty leased 6k SF of flex space in Addison to Lab Tec Cosmetics; and MEI Realty leased 4,500 SF of office space to K&G Customs Service at 2775 Algonquin Rd in Rolling Meadows.
Mark One Capital arranged $1.1M in bank financing for an 11-unit multifamily property at 844 S Humphrey Ave in Oak Park. Chris Parker, an associate director in the firm’s Dallas office, collaborated with Josh Sciotto, an associate director in its Phoenix office, to arrange the loan. The 25-year loan has a 4.125% fixed rate for seven years and amortizes over 25 years (with a 75% LTV).
Mid-America Real Estate Corp promoted Joe Girardi and Mike Phillips to principals and Brian Adams and Willie Hoag to SVPs. Joe is a member of Mid-Am’s shopping center investment sales team, focused on the disposition of retail properties. He’s been with Mid-Am since ’03 and graduated from North Carolina State University. Mike Phillips is part of the tenant rep team, repping national retailers throughout the Midwest. Mike has been with Mid-Am since ’07 and graduated from Bucknell University. Brian is also a member of the tenant rep team, focused extensively on restaurant tenant rep. He’s been with Mid-Am since ’05 and graduated from Indiana University. Willie, also on the tenant rep team, reps retail tenants throughout the suburban Chicago markets in addition to downstate Illinois. He has been with Mid-Am since ’05 and graduated from Boston College.
SVN|Chicago Commercial welcomed Stephen Cusano as VP, focused on leasing, acquisition and disposition of office and retail assets throughout the Chicago metro. Stephen spent the past five years at Ann Anovitz Associates and previously had a four-year stint in banking at Old National Bank. He’s a graduate of Indiana University.
CBRE promoted Deb Gallet to senior director within the asset services group. Her responsibilities include overseeing clients’ property management, leasing coordination, project management, construction management and tenant relations. Deb joined CBRE after its merger with Insignia/ESG in ’03 and has been in the business for over 25 years.
SVN|Chicago Commercial tapped Christian Peppler as an adviser, specializing in the representation of office and industrial tenants throughout the CBD. Christian was previously an associate with Newmark Grubb Knight Frank, where he oversaw $10M-plus in deals. He earned his degree from Loyola University.
JBS Commercial Real Estate partners Brian Silverman and Jason Shibata were awarded the exclusive leasing assignment for a portion of the newly acquired O’Hare portfolio from Greenfield Partners. The assignment includes roughly 350k SF of warehouse/flex buildings in Bensenville.
CBRE director of project management sustainability services Laci Wilkes was elected to the 2015 USGBC-Illinois chapter board of directors. Laci leads a national team dedicated to providing sustainability and consulting services to occupier clients in the Americas.