Marquette Set To Revitalize Another Suburban Multifamily Property
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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.”