In a tight market for commercial real estate debt, it might take a team of lenders to get a new construction deal done.
That was the case for Nick Melrose’s firm and his Singaporean partners, who are building an 18-story, $85 million multifamily project in Chicago’s South Loop.
Chicago-based Melrose Ascension Capital and Singapore-based Q Investment Partners closed on a $63.7 million loan for the project, which will include 358 beds geared toward students and young professionals. (Student housing is often measured by the number of bedrooms rather than entire units.)
The debt was provided by Glacier Global Partners, BH3 Management and Petros Finance, and the deal closed late last week, according to a news release. Equity for the project was provided by investment bank Julius Baer and private investors.
“Despite the current market challenges and construction pricing environment, our dedicated project teams have brought this to fruition,” Nick Melrose said in a statement.
It’s one of few big Chicago construction loans to close since interest started surging in 2022 as federal policymakers worked to combat inflation with a series of rate hikes.
Multifamily projects, however, have found ways to attract lenders. A team consisting of Jeff Shapack’s eponymous firm and CRG, the development arm of construction giant Clayco, recently pulled in an $84 million loan from Pacific Life for a large apartment project they’re building on Ada Street in the Fulton Market area.
Last year’s only major office development to start construction, Alex Najem and Shanna Khan’s 919 West Fulton Street, also took more than one lender to close; Bank OZK and Manulife provided more than $230 million in debt for the 400,000-square-foot project.
Melrose and Q Investment’s South Loop property was pitched for development in 2019 by a London-based co-living firm The Collective. The previous developers bought the land from big Chicago-based landlord Marc Realty for $4 million in 2019, public records show. It’s unclear how Q Investment and Melrose gained control of the property.
The finished project will include some fully furnished bedrooms and living spaces as well as unfurnished apartments, with a mix of studios up through four-bedroom layouts. Rents are set to start at $1,650, the developers’ news release said.
Editor’s note: The project’s total construction cost has been updated.
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