Fifield Companies scored a $24.75 million refinancing on an apartment complex in Fulton Market, navigating headwinds in the lending environment and Chicago’s multifamily market.
MetLife Investment Management insured the loan for the 102-unit Luxe on Madison apartments which also include 7,300 square feet of ground floor retail. The refinancing, arranged by JLL’s debt advisory arm, comes out to $245,000 per unit without factoring in the retail space.
It’s unclear what the total development cost was for the two-phase construction project, which began in 2009, but Fifield took out a $12.7 million construction loan in 2013 to complete the project. In 2017, the company refinanced the property with CIBC bank for $27.5 million, meaning the firm likely infused some cash into the investment to hang onto it this time around.
The financing signals confidence in Chicago’s rental market which has topped nationwide rankings of rent growth over the past few years. Although the city has not seen the extreme peaks and valleys in rental rates that were common in the Sun Belt, it has experienced a steadier climb.
But that doesn’t mean refinancing comes easily. Stubbornly high interest rates and strong competition from Chicago’s suburban multifamily market have made the debt environment challenging to navigate.
The property’s location gives lenders confidence, JLL Capital Market’s Senior Managing Director Mary Dooley said, calling Fulton Market “one of Chicago’s most dynamic neighborhoods.”
Dooley, along with Danny Kaufman, Rebecca Brielmaier and Mackenzie Jones of JLL’s debt advisory team represented the borrower.
Fulton Market has been a bright spot in the city’s beleaguered office market and last week became home to Chicago’s biggest lease this year, excluding renewals and expansions.
Amsterdam-based payment technology company Adyen inked a deal for nearly 97,000 square feet in the Sterling Bay-owned 333 North Green Street.
But even Sterling Bay executives know the neighborhood needs to pull back on office development.
As the former warehouse district continues to attract office workers, shoppers and diners, demand for multifamily development is growing. Around the same time that Sterling Bay secured the Adyen lease, the firm also pivoted from plans to build an 18-story office building at 350 North Morgan Street to instead moving ahead with a 39-story, 570-unit apartment tower on the same site.
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