Noah Properties Secures Suburban Chicago Multifamily Refinancing

Noah Properties scored a $42.5 million refinancing from Walker & Dunlop, despite wading into a tight lending environment constricted by high interest rates.

The loan is backed by the recently completed Encore at the Grove Apartments, a 120-unit senior living complex for adults aged 55 and up. The debt amounts to $354,000 per unit.

The apartments are the third and final phase of a 22-acre multifamily community in the Chicago suburb of River Grove. The first two phases of the development consisted of 162 multifamily units and 85 built-to-rent townhomes. The project also got funding assistance from tax increment financing set aside by the Village of River Grove.

Arrow Real Estate Advisors served as the debt broker for Noah Properties and locked down the loan last month. The financing was completed by Arrow founder and managing partner Morris Betesh as well as Jacob Petrovic and Omar Ferreira.

Multifamily development has served as a bright spot in Chicago’s commercial real estate market, which is still struggling to rebound from the pandemic. Office vacancy has been stuck around 25 percent, and several megadevelopments have stalled, including Sterling Bay’s Lincoln Yard’s life sciences campus. Bank OZK is seizing the northern segment of the proposed $6 million 53-acre development through deed in lieu of foreclosure.

But demand for market rate and luxury multifamily is growing due to the city’s large population of college-educated residents, diverse job market and virtually nonexistent incoming multifamily pipeline.

With The Grove project, Noah Properties was facing an additional hurdle of seeking investment in Cook County. Real estate investors have expressed more confidence in counties surrounding Cook County because their property tax systems are generally perceived as more predictable. In Cook County, the property tax system is undergoing significant overhaul under Assessor Fritz Kaegi that is ruffling feathers among the commercial real estate community.

Market uncertainty hasn’t slowed Chicago-based Noah Properties, which in the last six months has listed a 237-unit multifamily development in Northwest Chicago and received approval to build a 24-unit apartment building in Wicker Park.