BLOOMFIELD TOWNSHIP, MI-JR Management out of Bloomfield Township has secured $15.1 million in debt and equity financing for its purchase of two apartment complexes, one in Monroe, MI and the other in Toledo, OH. iCap Realty Advisors – Michigan arranged the financing for the investor, which sources say purchased the 172-unit Oak Forest apartments in Monroe for $9.1 million, and the 143-unit Oakwood Villa apartments in Toledo for $6.6 million.
Larry Harwood, senior director with iCap Michigan, arranged an $11.6 million public mortgage loan from JP Morgan, at a 5.84% interest rate with five years of interest-only payments and a 30-year amortization thereafter. Harwood also arranged an equity infusion of $3.5 million from a private investment fund. He says its become increasingly difficult to obtain a high loan-to-value ratio. "Borrowers are being required to contribute more equity into their transactions, which means we must be prepared to quickly locate additional equity sources as necessary," he says.
Hendricks & Partners handled the sale. Rents at the properties are from $607 to $935 per month at the 21-year-old Oak Forest and $579 to $919 per month at the 19-year-old Oakwood. Harwood tells GlobeSt.com that the two complexes together are 89% occupied. He says he thinks rents will start to go up eventually. "There's been a lot of layoffs, and people not being able to handle mortgages, you'll find a lot of them moving back to apartments, that should decrease apartment vacancy," Harwood says. He says the seller is a national company that did not want to be named.
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