Forest City lands $93M refi on massive resi complex near O’Hare

The new loan will allow the investment trust to pull $46M out of the Pavilion apartments

Chicago /
Jun.June 19, 2018 03:00 PM

Forest City president and CEO David LaRue, with the complex

Forest City Realty Trust took out a $92.7 million refinancing on a giant residential complex near O’Hare International Airport.

The new loan from KeyBank will allow the Cleveland-based investment trust to pay off $47 million in old debt on the 1,114-unit Pavilion apartment complex and pull out another $45.8 million in cash, according to Crain’s.

The 10-year, interest-only loan carries a 4.05 percent interest rate. It was packaged with other apartment mortgages to secure a bond offering by Freddie Mac.

In taking out the loan, Forest City is pursuing a strategy growing in popularity among commercial real estate investors in many sectors. It involves refinancing instead of selling, in order to take advantage of rising property values without having to give up an investment property.

Refinancing loans accounted for 61 percent of U.S. loan volume in the first quarter of 2018, up from 45 percent in 2015, according to Real Capital Analytics.

The 50-year-old Pavilion complex at 5441 North East River Road was appraised at $186.2 million, according to a report by Fitch Ratings. It was 90.9 percent occupied in January, according to Fitch, and generated net operating income of $9.1 million over the prior 12 months.

Forest City developed the Central Station residential complex in the South Loop, where it also has two apartment towers.

The company is talking to Brookfield Asset Management about a sale for $25 to $25.50 per share. Three months ago, Forest City rejected a takeover offer of $25 per share from Brookfield and declared it would remain an independent company.  [Crain’s] — John O’Brien


Related Articles

arrow_forward_ios
Sterling Bay CEO Andy Gloor and 345 North Aberdeen Street (Sterling Bay, Google Maps)
Sterling Bay adds to Fulton Market portfolio
Sterling Bay adds to Fulton Market portfolio
The mixed residential building with Thomas Roszak (Parkline, Roszak)
Parkline cuts condos after zero sales
Parkline cuts condos after zero sales
Donald Trump and the Trump International Hotel & Tower in Chicago (Getty, iStock)
Donald Trump is owed $1M tax refund on Chicago skyscraper
Donald Trump is owed $1M tax refund on Chicago skyscraper
Complete Care Management CEO Sam Stein and 4920 N Kenmore Avenue (Complete Care Management, Google Maps)
Lakeview nursing home sells for $25M amid sector’s challenges
Lakeview nursing home sells for $25M amid sector’s challenges
Apollo Global CEO Marc Rowan with the property (Apollo, LoopNet)
Apollo Global gulps down Dr. Pepper bottling plant
Apollo Global gulps down Dr. Pepper bottling plant
Hines CEO Jeffrey Hines with Salesforce Tower, which the firm is developing. (Hines)
Kirkland & Ellis negotiating 600K sf Salesforce Tower lease
Kirkland & Ellis negotiating 600K sf Salesforce Tower lease
Amazon founder Jeff Bezos with the Waukegan warehouse (Getty, CBRE)
Amazon inks lease for another suburban warehouse
Amazon inks lease for another suburban warehouse
Aon Center at 200 East Randolph
Kraft Heinz renews big lease at 601W’s Aon Center
Kraft Heinz renews big lease at 601W’s Aon Center
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...