Origin Investments and Randolph Street Realty Capital landed a $36 million refinancing for a 262-unit Naperville apartment complex.
The loan will pay off existing debt and fund renovations at some of the units at the Iroquois Club Apartments, located at 1101 Iroquois Avenue.
Origin and Randolph Street did not identify the lender, but sources said it was New York Life Insurance Company.
The hybrid loan features $35 million borrowed on a fixed rate and $1.08 million on a floating rate, and includes interest-only amortization and a flexible prepayment structure after three years.
Origin and Randolph Street bought the complex for $38 million in September 2015 and then renovated its clubhouse and a number of units. Average rents have increased 23 percent since the acquisition.
HFF’s Josh Simon and Jason Bond represented the complex owners in the deal.
Refinancing is growing in popularity among commercial real estate investors in many sectors as they 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.
Forest City Realty Trust recently took out a $93 million refinancing on the 1,114-unit Pavilion apartment complex near O’Hare International Airport. And Bayshore Properties secured a $26 million refinancing on the 354-unit Riverwoods Apartments complex in south suburban Lansing.
Suburban rents grew 6.9 percent last year and were expected to rise again “significantly” this year, according to a recent Marcus & Millichap report.