Multifamily - Debt, Sale

Northmarq facilitates the $42,800,000 transaction, $27,423,000 financing for Terra Creek Apartments & Townhomes in Rockford, Illinois

CHICAGO, ILLINOIS (July 15, 2022) –Managing Director Parker Stewart, Senior Associate Alex Malzone, and Associate Vice President Dominic Martinez of Northmarq’s Chicago and St. Louis investment sales team completed the $42,800,000 contribution of Terra Creek Apartments.  Brett Hood, managing director of Northmarq’s Chicago office, secured $27,423,000 in acquisition financing for the 278-unit complex located at 375 Bienterra Trail in Rockford, Illinois.  The loan was arranged through Freddie Mac on a 10-year fixed rate structure at just under 65 percent of purchase price at full term interest only.

The borrower is an affiliate of MLG Legacy Fund and its real estate investor manager MLG Capital based in Brookfield, Wisconsin. Opposed to outright sale, the seller contributed its equity interest in the property to the fund in exchange for ownership units offering diversification across multifamily assets across the country.  The Legacy Fund offers numerous benefits beyond what is typically available in a conventional tax-deferred transaction like a 1031 exchange, UPREIT, or DST structure.  Its a tax-efficient solution for owners of appreciated real estate assets who are ready to divest, yet still want to maintain a stake in the financial returns that the properties generate. 

“After completing a competitive marketing process, MLG presented a unique opportunity that allowed the prior long-term ownership to liquidate the asset while replacing it with passive cash flow, and the ability to defer capital gains,” said Stewart.  “At the property level, Terra Creek presented the ideal opportunity for MLG to take ownership control and implement an intensive renovation program that will ultimately lead to a significant increase in gross revenue.”  

“Terra Creek has a high component of “mission-qualifying” rents, and Freddie Mac was very aggressive on both pricing and structure,” added Hood. “It is a high-quality transaction and a high-performing property in terms of occupancy and overall cash flows. Additionally, MLG is planning to undertake a large renovation of the asset post-acquisition.” 

Only minutes from Interstate 90 and shopping, restaurants and schools, Terra Creek is in a prime location. The property, with nine floor plans to choose from, is a solid asset, boasting stellar performance in Rockford, a healthy, secondary market in the Midwest. Rockford—approximately 90 miles northwest of Chicago—is the fifth largest city in Illinois.

Terra Creek was built in three phases in 1992, 2015 and 2019. Of the 278 units, 48 units are single-structure, high-quality townhomes. Features at Terra Creek include private entries, second-floor cathedral ceilings, 10-foot breakfast bars, and marbleized bathroom vanities. The property also has a clubhouse with a fitness center, a community room, a heated swimming pool and a large sun deck.

Northmarq is a full-service capital markets resource for commercial real estate investors, offering seamless collaboration with top experts in debt, equity, investment sales and loan servicing. We combine industry-leading capabilities with a flexible structure, enabling our national team of experienced professionals to create innovative solutions for clients. Our solid foundation and entrepreneurial approach have built an annual transaction volume of more than $37 billion and a loan servicing portfolio of nearly $76 billion. Through the 2022 acquisition of Stan Johnson Company and Four Pillars Capital Markets, Northmarq introduces clients to expanded opportunities across all major asset classes.