Janover has closed a $3.7 million acquisition loan package for a 57-unit multifamily community in Chicago through its commercial real estate financing platform. Arbor provided the Fannie Mae Small Loan note at an LTV ratio of just under 80%.
The 10-year loan is non-recourse and features a competitive fixed interest rate and one year of interest-only payments followed by a 30-year amortization period. Brandon Ramineh, director of capital markets at Janover, coordinated the transaction.
"This deal was a bit unique in the sense that the key principal was an entity, rather than the typical ‘warm body’ that Fannie Mae likes to see," said Ramineh. “We utilized a Fannie Mae SERL, or Streamlined Early Rate Lock, to take advantage of a dip in the Treasury when we saw it, and, thanks to a favorable appraisal, the borrower was able to cover some closing costs as part of the deal.”
Located at 200 N. Kenneth Ave., the community in West Garfield Park was constructed in the 1920s. The four-story property has a mix of one-, two-, and three-bedroom units, about 6 miles west of the Loop.
The asset is within half a mile of the Cicero L station on Chicago’s Green line and is a short distance north of Interstate 290. Although the surrounding area is predominantly single-family residential, other small multifamily assets — many of which are conversions from older homes — operate nearby.
Strengthening Market Fundamentals
Although Chicago may not make most investors’ lists of top multifamily markets, the winds may be shifting. While investors in all asset types may hesitate over tax changes in the past few years, the metro’s fundamentals are getting stronger.
Freddie Mac’s Multifamily Apartment Investment Market Index, updated for the second quarter, places Chicago well above the national index, thanks to employment gains and growing property values among other factors. The market’s vacancy, too, appears likely to remain low, due to relatively sluggish construction. These factors position the Windy City favorably to many similar metros.