A portfolio largely in affluent Chicago neighborhoods

CHICAGO—Meridian Capital Group, LLC, a national commercial real estate finance and advisory firm, recently finished negotiating an $80 million mortgage for the refinancing of a portfolio with 11 multifamily properties located in affluent areas of Chicago’s North Side and several suburbs.

“In general, across the country the multifamily market is really strong,” Max Herzog, managing director in Meridian’s New York office, tells GlobeSt.com, “especially in Texas, San Francisco, New York and Chicago. And rents have been trending upwards for the last two years or so, and many owners have decided to take advantage of long-term interest rates, which are still at historic lows.”

The 10-year mortgage features a fixed rate of 4.40% and was provided by AXA Equitable Life Insurance Company. Herzog and Meridian vice president Jacob Schmuckler, also from New York, negotiated the transaction. And Herzog says the Equitable’s advisor, Quadrant Real Estate Advisors, LLC from Alpharetta, GA, played a key role in completing the deal.

The portfolio has 583-units in buildings between five and 25 stories tall including a 138-unit property located on E. Delaware Pl. on Chicago’s Near North Side and an 86-unit property on W. Deming Pl.

“Quadrant was able to provide a long-term, fixed-rate balance sheet loan at close to 75% of the portfolio’s value,” says Herzog. “This allowed the borrower to rate-lock a lower interest rate on several of their core assets with significant flexibility during the term of the loan.”

Life insurance companies more typically provide loans at about 60% to 65% of a portfolio’s value, Herzog adds. But in this case, the strength of the ownership, Equitable’s confidence in Quadrant, and the fact that the buildings, most of which are several decades old, are well-managed and well-located in affluent neighborhoods, helped fortify the deal.