Marquette Set To Revitalize Another Suburban Multifamily Property
The Marquette Cos. is set to upgrade another suburban apartment community, and lenders have given their help. The company, which completed several major suburban investments this year, just secured $27.5M in financing for Valley Lo Tower II, the 112-unit mid-rise in Glenview it acquired in October for $34.1M.
HFF Managing Director Matthew Schoenfeldt worked on behalf of Naperville-based Marquette and LEM Capital to secure the five-year, fixed-rate loan through Allstate Investments. The new owners used the loan to acquire the 1980s-era development and finance substantial upgrades.
Marquette and another partner also bought Willow Crossing, a 579-unit community in Elk Grove Village, for $80M earlier this year. Schoenfeldt helped secure $56.5M in financing for that deal, which also funded capital improvements.
It is a good time for such value-add plays. Although developers have about 4,000 suburban apartments underway, several years of robust construction have not made a dent in the vacancy rate, which has hovered near or just below 5% for nearly a decade, according to a third-quarter report from Marcus & Millichap.
And to lenders, value-add plays make the most sense for properties with special features.
“While Valley Lo II is of a slightly older vintage and the per-unit basis is somewhat elevated, the uniqueness of its large, single-family-home-like units, heated underground garages and superb public schools attracted a strong level of interest,” Schoenfeldt said. “Even if a land parcel could be secured in a similarly compelling location, the cost to construct a building of this quality inclusive of underground parking would be prohibitive. The partnership truly has a diamond in the rough.”
Valley Lo Tower II units average nearly 1,800 SF. Community amenities include a 2,300 SF clubhouse, an outdoor swimming pool and a tennis court.
“In order to deliver this financing, it required a subset of lenders that have a deep understanding of Chicago’s affluent north shore and the demanding tenants that reside there,” Schoenfeldt said. “There is conviction that the ‘renter-by-choice’ tenants are eager for upgrades to these boutique units.”