Akara Partners has secured crucial refinancing for a River North apartment building, but it required $3 million in additional equity, underscoring the difficult lending environment.
An affiliate of Pangea Properties issued a $19 million loan for the Hensley, a 43-unit complex, at 707 North Wells Street, that Chicago-based Akara developed nearly a decade ago, Crain’s reported. The loan equates to $441,800 per unit.
The previous loan on the property, a $22.1 million mortgage from a Greystone affiliate, was set to mature last August. It’s unclear how Akara settled the prior debt, but it would’ve needed to raise $3.1 million, or put it in itself.
The move underscores the strain higher interest rates place on commercial property owners, necessitating significant cash infusions for refinancing, even amid surging apartment demand and strong rent growth.
As of March, $240 million of multifamily debt in Chicagoland was watchlisted by lenders, largely because of floating interest rates.
Some apartment landlords have lucked out in recent months, though. CedarSt secured a $44 million loan for its 260-unit complex in the West Loop, and 312 Properties scored $31 million refinancing for the Drexel Apartments near Hyde Park.
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An affiliate of Akara issued its $14.2 million construction loan when it set out on the development in 2014. The property is nearly 98 percent leased, with an average monthly rent of $3,600, or $3.43 per square foot, the outlet reported, citing CoStar Group.
Akara’s other Chicago assets include the 47-unit Linkt apartment building, in River West, and the 206-room Home2 Suites by Hilton, at 110 West Huron Street. Akara refinanced the hotel with $57 million in 2020, just before the pandemic pummeled the hospitality industry.
—Quinn Donoghue