The fund obtained a fixed-rate mortgage from Fannie Mae with 65% LTV to finance McDowell Place. Allan Edelson of CW Capital LLC placed the financing.

Situated less than one mile from the four-way interchange of Route 59 and the East-West Tollway (I-88), McDowell Place has a unique infill location, Pinksy says. Naperville has become an in-fill location with limited, if any, future apartment development. New apartment construction has diminished significantly in the entire suburban market with only 406 new apartments built in Dupage County in the last five years.

Built in 1988 and renovated between 2006 and 2008, McDowell Place is comprised of: 160 one bedroom/one bath apartments; 160 two bedroom/two bath apartments; and 80 two bedroom/one and one half bath townhomes. The apartments average 1,016 square feet and feature individual HVAC, fireplaces and vaulted ceilings. The property is currently 95% leased with an average rent of $1.03 per square foot.

The $6.2-million renovation included: updated kitchens, an extensive redecoration and reconfiguration of the clubhouse, and exterior and mechanical improvements.

“We think there is considerable upside with McDowell Place because there is substantial room to increase income,” Pinksy says. “The leases are at lower rates than the market.”

Pinksy adds: “As the Echo Boomer population comes into prime renting years, and unemployment comes down, we think we'll do very well over the holding period. This property was financed with a seven-year term, and at the end of the term, it will be up to us and the investors in the fund to decide whether to sell or continue to hold it.”

Dan Cohn, Melissa Strauss and John Jaeger of CB Richard Ellis facilitated the transaction on behalf of the seller,