CHICAGO—NorthMarq's Chicago regional office just arranged a first mortgage refinancing of $32.963 million through Freddie Mac for Landings at Amhurst Lake, a 340-unit, multifamily community owned and operated by the Chicago-based RMK Management. Although interest rates have recently spiked, NorthMarq was able to lock in a low-interest rate for the luxury housing development located at 1375 S. White Oak Drive in suburban Waukegan through Freddie's Early Rate Lock program. Financing for the borrower was based on a 10-year term with 3 years interest only, and thereafter a 30-year amortization schedule.
“The borrower was able to secure long-term debt at 3.63% interest, with an Early Rate Lock execution prior to the recent jump in rates. Timing is everything,” says Sue Blumberg, senior vice president and managing director of NorthMarq's Chicago office. “This long-time loyal Freddie Mac borrower received the best pricing in the market for this class A property. They have achieved best-in-class rent growth in a very timely market.”
Had NorthMarq not gotten the lower, locked-in rate, “the amount of the loan would have definitely been reduced.”
Although Freddie opens the early rate program to anyone, for long-time borrowers things tend to move quicker, Blumberg says. “But the onus is on us, as the originator, to give [Freddie] enough information.” NorthMarq helps certify the condition of the property and its finances and Freddie goes out and does an inspection. “This allows them to lock in the rates and then we complete the due diligence.” But “for first-time borrowers who might be unknown, Freddie Mac has the right to ask for more information.”
It did not hurt that RMK operates over 8,000 units in 29 developments, most of them in the Chicago area, and has acquired a reputation for expert management. Furthermore, the property itself sits in a very desirable area, just minutes from I-94 and I-294 and several major employers such as Abbott Laboratories.
Now that rates have gone up, and perhaps gotten more uncertain, the early lock program may assume a greater importance, Blumberg says. “When rates were steadily falling, the pressure was off; but now I think it will go back up.”
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
