CHICAGO—CityR Group recently bought the New Colonies, a 672-unit multifamily in south suburban Steger, for $51.658 million, its first acquisition in the Chicagoland region. The property sits at 316 W. 34th St. in Steger about 35 miles south of Chicago. Eastern Union Funding, a New York-based mortgage broker, arranged a $42 million loan for the purchase, one of several it has done in the area. This was one of CityR Group's biggest deals yet.
Originated by Eastern Union president Ira Zlotowitz and Michael Muller, senior managing director, the Fannie Mae loan features a ten-year term, locking in a 4.03% interest rate. Provided by Arbor Commercial Mortgage, the loan covers roughly 83% of the purchase price.
“As CityR started working on larger deals we facilitated their growth accordingly, and the underwriting that went into this deal allowed us to obtain the full proceeds we needed,” Zlotowitz says. “Thanks to our relationship with Arbor and understanding of Fannie Mae, we could ultimately deliver the dollars, branch out into different markets, complement a nationwide presence and grow with our client.”
CityR Group has offices in the US - where it owns thousands of units - as well as Israel and London. Yariv Ben-Ari of Akerman LLP represented CityR Group on the transaction.
“For us, this deal is about increasing upside and growing as a multinational firm,” says Michael Sabo, CityR Group chief executive officer of American acquisitions. “Eastern Union has become a national brand and they could appreciate that. With the New Colonies' proximity to Chicago and 98% occupancy, we look forward to installing new amenities and raising output from rents.”
“This is a class B property with a ton of upside potential,” Muller adds. “It's right up CityR's alley with their knack for repositioning and maximizing potential.”
Another Eastern Union official tells GlobeSt.com that CityR doesn't typically go into a deal with the intention to sell. An exit strategy is possible if it will make money for investors, but in general, CityR's plan is to realize the upside and generate returns.
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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.
