NorthMarq’s Chicago office arranges $33,417,000 in acquisition financing of four-property multifamily portfolio in Grand Forks, North Dakota

CHICAGO, ILLIONIS (September 1, 2020) – Brett Hood, senior vice president of NorthMarq’s Chicago office, secured $33,417,000 in combined agency debt facilitating the acquisition of four independent multifamily properties all located within the city limits of Grand Forks, North Dakota. The collateral encompasses 691 units across four quality workforce communities with in-place average rent structures deemed affordable and qualified as mission-driven under the agency’s affordability directive. The properties include Forest Park Apartments (269 units), Valley Park Manor (168 units), Southwind Apartments (164 units) and Landmark Estates (90 units).

The Freddie Mac provided financing allowed for four cross-collateralized loans ranging from $2,874,000 to $15,885,000 representing approximately 78.6 percent of the sponsor’s portfolio purchase price. The loans were structured with 15-year terms featuring 7 years interest only followed by 30 years of amortization.

“The transaction enabled the sponsor an opportunity 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 40 days from application to funding across four loans. The borrower also utilized Freddie’s index-lock feature during the due diligence period.” 

Each of the four properties are located in Grand Forks proper, the 3rd largest city in North Dakota and growing. The local economy is stable and diversified across a number of industries; higher education, healthcare, food processing, financial, manufacturing, and aviation/aerospace are the primary employment sectors. Policy changes and a favorable tax environment have made the area home to many financial and professional service institutions, including Alerus Financial, Acme Tools, and Choice Financial. Also integral to the Grand Forks economy is the University of North Dakota. With a total undergraduate enrollment of over 10,000, the institution also represents the only medical and law schools in the state.