Investor lands big refinancing for apartments in Tinley Park, Hoffman Estates

Manna Capital refinanced the 249-unit Enclave Apartments and 208-unit Residences at 159 Tinley Park Place with loans of about $25M each

Charles Gibbs, Director of Acquisitions for Manna Capital, and The Residences at 159 Tinley Park Place and Enclave Apartments of Hoffman Estates
Charles Gibbs, Director of Acquisitions for Manna Capital, Enclave Apartments of Hoffman Estates (top) and The Residences at 159 Tinley Park Place (Credit: Google Maps)

A Chicago-based multifamily investor landed more than $50 million in financing on pair of renovated apartment complexes in Tinley Park and Hoffman Estates, two “bright spots” in the otherwise-shaky landscape of suburban real estate, a manager of the firm said.

Manna Capital this month secured a $25.3 million loan on its 208-unit Residences at 159 Tinley Park Place and a $25 million mortgage on the 249-unit Enclave Apartments in Hoffman Estates, according to Cook County property records. Both loans were extended by New York-based Arbor Realty Trust.

Manna, led by founder and CEO Roy Blavvise, bought the Enclave apartments from investor Val Trif in early 2015, records show. The price was not disclosed in a recorded deed, but Crain’s reported the sale at $17.5 million.

About a year later, Manna paid $19.1 million to buy the Tinley Park complex from Orlan Creek, according to property records.

Both properties looked like attractive targets because they were in areas where median incomes were on the rise, and “the demand for higher-end finishes was there,” said Charles Gibbs, director of acquisitions for Manna.

The firm and its investment partner, Skokie-based Tri-United Group, spent the next several years on “wholesale interior renovations” including new flooring and appliances in all the units, plus updated clubhouses with fitness centers and leasing offices on both properties, Gibbs said.

Gibbs declined to say how much the renovations cost, but the firm typically spends around $10,000 per unit on improvements, plus more for work on common spaces, he said. That would bring the cost near $3 million per property.

Sign Up for the undefined Newsletter

The mortgages secured this month replace a $17.8 million loan Manna took out from MB Financial Bank on the Tinley Park complex in January 2017, and a $17.5 million loan extended by First Midwest Bank on the Enclave property in December 2016, according to property records.

The new loans position Manna for a “long-term hold,” Gibbs said.

Studio apartments rent at the Enclave complex starting around $900 per month, and one-bedrooms at the Tinley Park property start at $1,250, according to listings.

Manna now owns about 2,500 apartments across northern Illinois and Indiana, and it’s looking to expand into smaller Midwest cities like Memphis, Louisville and Columbus, Gibbs said.

The certainty of sharply higher property taxes in Chicago is part of what’s pushing Manna to look elsewhere, he added, calling County Assessor Fritz Kaegi’s first round of tax assessments on north-suburban properties “a little scary.”

“If we weren’t based in Chicago, with specific knowledge of the submarkets, it would be very hard to get excited about Chicago-area deals right now,” Gibbs said. “There aren’t many suburbs where we’re seeing population and job growth … but these two areas (Hoffman Estates and Tinley Park) are two bright spots.”

On Thursday, Cook County Clerk Karen Yarbrough released numbers indicating that commercial property owners near Downtown could expect about a 10 percent hike in their property tax bills compared to last year.