Supera Asset Management scored a big debt package this month on ten multifamily properties in Lakeview and Lincoln Park, pulling in enough cash to retire previous loans originated in the super low-interest era and pocket the difference.
The local landlord, led by CEO John Supera, managed to lock in interest rates ranging from 5.14 percent to 5.25 percent on the 549-unit portfolio amid a still “volatile” environment, even after the Federal Reserve made its second cut of 2024 to the Federal Funds rate earlier this month, the company said.
Chicago’s Essex Capital Markets brokered the $59.1 million refinance for Supera, its CFO Patrick Keenan said. The deal is made up of 6 full-term interest-only loans provided by Fannie Mae.
The transaction ended up being “net cash-out” for Supera, Keenan said, meaning the firm was able to take out larger loans, use the new debt to pay off previous loans on the buildings and still retain some remaining funds. He declined to specify how much they netted.
Property records show that previous loans on the properties were issued between 2019 and 2021 and totaled $50.6 million across all ten buildings. This means the refinancing deal resulted in a net cash-out of $8.5 million for Supera.
“Rates had gone up significantly from the 2021 transactions that we were replacing, that was just the reality. We basically just tried to get the best rate we could given the market conditions,” Keenan said. “And while the rate was higher than what we were coming out of, we believe it was the lowest available rate in the market.”
The loan terms range from from 7 to 12 years. Across the river on the Northwest Side, neighborhood multifamily owners have been in a panic lately over a new anti-gentrification ordinance passed by the City Council, which offers tenants the right of first refusal if their building is on the market, and could lead to drawn-out sales. This could push investor demand closer to the lakefront on the North Side, potentially raising values in Lakeview and Lincoln Park.
”Just the fact that we have a concentrated portfolio of assets in one market is unique,” Keenan said. “So, it’s very much a long-term hold strategy.”
Revenues at the properties have made a healthy recovery since the early days of the pandemic, he said. “So we changed our strategy a little bit, and we were open to putting much longer term debt in place on the portfolio.”
Several of the Fannie Mae loans were provided just for a single property, and others for groupings of buildings, according to a news release.
Essex’s Darragh Griffin facilitated the transaction along with Quinn Keenan.
The ten properties contain a total of 549 units. The buildings included in the portfolio are: 530 West Arlington Place (93 units), 451 West Melrose Street (63 units), 3941 North Pine Grove Avenue (105 units), 440 West Barry Avenue (64 units), 527-37 West Aldine Avenue, 2616 North Hampden Court, 649-57 West Oakdale Avenue (114 units), 523-31 West Fullerton Avenue, 536 West Grant Place, and 543-53 West Wellington Avenue (100 units).
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