Multifamily - Debt

NorthMarq’s Chicago office arranges $41,479,000 in acquisition financing for Hinton Heights in Cottage Grove, Minnesota

The property, financed by Freddie Mac, is 100 percent ‘Mission Driven’

CHICAGO, ILLINOIS (March 8, 2021) – Brett Hood, managing director of NorthMarq’s Chicago-based regional office, secured $41,479,000 in Freddie Mac debt to facilitate the acquisition of Hinton Heights in Cottage Grove, Minnesota. The loan represented 79.8 percent of the subject purchase price featuring a 7-year fixed-rate term with three years of interest only payments. NorthMarq arranged financing for the borrower, an affiliate of Oak Residential Partners, through its OPTIGO status as a Freddie Mac lender. The subject acquisition represents the first for ORP’s latest fund vehicle eclipsing 10,000 units acquired nationwide since company inception. 

“Despite the dramatic rise in treasury yields shortly after putting the deal under contract, the sponsor was still able to lock in an attractive sub-three percent coupon rate for the term of the loan,” said Hood.  

Hinton Heights is a 249-unit premier, garden-style apartment community located in Cottage Grove, a suburb of St. Paul, Minnesota. Constructed in three separate phases (1990, 1994, and 1995), the property offers garages with direct-access private entrances to the units and immediate proximity to the local high school and retail. Spread across 24.2 acres, the property boasts large one-, two-, and three-bedroom floorplans. Renovated apartments include stainless steel appliances, vinyl flooring, upgraded cabinetry, upgraded fixtures, walk-in closets and washer and dryer machines. The sponsor will continue unit renovations and plans to modernize the community will include rebranding, painting the buildings, upgrading the clubhouse and fitness center, and improving outdoor community areas.

The Minneapolis-St Paul MSA is the second largest economy in the Midwest with the second highest ranked multifamily market occupancy performance nationally. The area is home to a diverse economic base serving as corporate headquarters for 16 Fortune 500 companies. The subject is within a few minutes’ drive to several large companies including 3M, CHS, Ecolab, Travelers, Anytime Fitness, Securian, and Tradehome Shoes. Other large employers in the area include Renewal by Andersen Windows, Up North Plastics, Evergreen Industries, Hartford Insurance, and Marathon Oil. The property is conveniently located just off Highway 61 with easy access to I-494 connecting the area to the surrounding MSA.

“The subject transaction was an ideal fit for the Freddie Mac program, with 100 percent of the units considered ‘Mission Driven’ based upon in-place rent levels and the deal received significant pricing benefits,” said Hood. “Freddie stepped up and was able to execute at the higher leverage point while still providing interest only at an attractive coupon.” 

As a capital markets leader, NorthMarq offers commercial real estate investors access to experts in debt, equity, investment sales, and loan servicing to protect and add value to their assets. For capital sources, we offer partnership and financial acumen that support long- and short-term investment goals. Our culture of integrity and innovation is evident in our 60-year history, annual transaction volume of more than $16 billion, loan servicing portfolio of more than $65 billion and the multi-year tenure of our nearly 600 people.