CHICAGO, ILLINOIS (January 15, 2020) – Brett Hood, senior vice president of NorthMarq’s Chicago-based regional office, secured $35,384,000 in combined agency debt facilitating the acquisition of seven independent multifamily properties all located within the city limits of Sioux Falls, South Dakota.
The collateral encompasses 525 units across seven quality workforce communities with in-place average rent structures deemed affordable qualifying as mission-driven under the agency’s affordability directive. The Freddie Mac-provided financing allowed for seven separate loans ranging from $1,935,000 to $9,300,000 representing approximately 77 percent of the sponsor’s aggregate capital stack. The 15-year loan terms were structured with an impressive 7-years interest only followed by 30 years of amortization. The borrower utilized Freddie Mac’s index lock feature eliminating interest rate risk early in the due diligence process.
“The opportunity for the sponsor was to acquire a well-maintained, institutionally-operated, historically well-occupied, diversified portfolio with cash flow stability and positive underlying revenue trends,” said Hood. “The nature of Freddie Mac’s execution allowed for an effective and timely closing process, an impressive 42 days from application to funding across seven loans during a very busy 4th quarter. Additionally, NorthMarq had client relationships on both sides of the buy/sell transaction so meeting the tight closing timeframe was of the utmost importance. It took an entire team of quality, experienced professionals to accomplish the goal.”
Sioux Falls is the largest city in South Dakota and growing. The local economy is diversified across a number of industries, with key/expanding locations for several blue chip multinational corporations. Businesses are drawn to the friendly business/tax climate, low cost of living index, and a highly educated workforce. Several of the properties reside in close proximity to Citibank’s newly relocated $72 million corporate campus and Avera’s massive $172 million specialty campus that just delivered its first building.