CHICAGO—Stadt Group Ltd. has just acquired Timber Creek Apartments in suburban Woodridge for $25 million in a joint venture with Buffalo-based real estate firm Sinatra & Co. Real Estate. In doing so, the firms have continued a recent trend that has seen a host of investors buy up comparable suburban multifamily properties and pour money into renovations that position the properties for sales or as long-term investments.

This 304-unit multifamily complex was built in 1975 and sits on 17.3-acres at 3421 Foxboro Dr. The acquisition mirrors Stadt Group's 2012 purchase of the 300-unit Woodbury Place in Schaumburg. The Chicago-based firm paid $19.6 million, and then launched a comprehensive renovation of the property's interiors and exteriors. It has a similar value-add strategy for Timber Creek, and plans to help the 92% leased community meet market expectations by doing complete unit renovations and adding amenities.

“We have gotten a lot of compliments on the work we did at Woodbury, and want to do the same for Timber Creek,” Peter Gerhold, CEO and principal of Stadt, tells GlobeSt.com.

In some ways, Woodbury was a tougher job, since unlike the well-leased Timber Creek, the Schaumburg property had some units that were uninhabitable. But today it is under contract for sale, Gerhold says. He can't disclose the price until the sale is finalized, but did say the property was appraised at more than $40 million.

In November of 2015, Stadt Group and Sinatra partnered on Orchard Village, a 272-unit community in Aurora, IL. The team believes in the continuing growth of the western Chicago suburbs due to their proximity to flourishing business corridors along I-88 and I-355, access to public transportation and exceptional educational institutions.

“A lot of the demand is coming from young people who had lived in the city, but once they get their feet on the ground, many want to escape the downtown rigmarole and live in a quieter setting,” says Gerhold. The challenge for property owners is that these residents do insist on “downtown quality.”

Timber Creek's units feature private entrances, spacious patios and balconies, and wood burning fireplaces. The new owners will completely re-design its stand-alone clubhouse and add a fitness center, clubroom with kitchen, leasing/management office, laundry lounge, Cyber Café to compliment the outdoor swimming pool, sundeck and fireplace and grilling stations.

Financing was arranged by Cohen Financial, a Guggenheim Partners subsidiary, and The Private Bank.

Gerhold expects this new renovation will take up to 30 months to complete. “This is not an empty property,” he explains, and the company will rehab units as each turns over. And once this job is done, he expects the property will generate a strong flow of income. “We will hold it for the long-term.”

“We have gotten a lot of compliments on the work we did at Woodbury, and want to do the same for Timber Creek,” Peter Gerhold, CEO and principal of Stadt, tells GlobeSt.com.

Financing was arranged by Cohen Financial, a Guggenheim Partners subsidiary, and The Private Bank.

Instant Insights /

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