CHICAGO- Lenders are reporting an increase in multifamily loan originations, as the apartment market continues to benefit from home value decreases and interest rates remain low. Areas such as Chicago, with strong infill locations, are seeing numerous transactions, high tenant demand, increased rents and dropped concessions.
Aaron Abelson with Alliant Capital’s local office agreed that multifamily has rebounded from the recession with strength. He says his firm has closed about $72 million in apartment complex refinancing in the second quarter through Chicago and southern Wisconsin.
Recent Alliant closings include a $12 million refinance for Horizon Realty Group for its mixed-use Sheridan Lake building in north Chicago, a $24 million refinance of the 574-unit Westwood Manor complex in West Chicago and an $8 million refinance for Carriage Way in New Berlin, WI. Abelson says his firm has allocated $350 million for additional multifamily funding through the end of the year.
Other lending agencies are also seeing fresh deals. Cohen Financial reported Monday that it has secured more than $11 million for two apartment properties in the trendy Lincoln Park neighborhood in the city. Michael Grant, a director in the company’s local office, said he secured a $5.3 million loan for $5.3 million for a five-story, 110-unit property in the Lake View portion of the neighborhood, as well as a $6 million loan for a five-story, 118-unit building. Both buildings are 100% leased, he said in a statement.
Abelson says there’s three reasons why there’s more multifamily transactions here. Investors are looking for quality performing multifamily assets, matured bank loans need refinancing and interest rates are still favorable. “We’re seeing in our market occupancy at historic levels,” Abelson tells GlobeSt.com. “There are some infill locations within Chicago where vacancy is non-existent, very little concessions are offered and rents are trending up. I don’t see a light at the end of the tunnel for single-family residential problems, so renter-ship will likely stay at the same pace for some time.”
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