The greater Chicagoland commercial real estate market offers investors a nice reprieve from the frothy coastal markets while featuring an attractive mix of institutional and trophy assets coupled with an abundance of value-add opportunities spread throughout the market’s diverse mix of neighborhoods. The market offers solid fundamentals including a relatively young and educated workforce, diverse employment base and the third largest economy in the United States.
Bloomfield Capital has funded commercial real estate projects in the greater Chicago area since 2008, with a focus on opportunistic and value-add transactions with urgent closing timelines. As commercial real estate transaction volume in Chicago reaches an all-time high and banks remain cautious around heavy renovation/capital improvement projects, borrowers need a reliable and experienced capital provider to fill the gap. So what can borrowers do to present themselves as qualified for hard money loans?
Qualities of the Ideal Borrower
Below are three previous transactions secured by commercial real estate in Chicago that benefited from Bloomfield’s responsiveness and local market knowledge:
Chicago, IL Multifamily Refinance: Substantial Renovation
Bloomfield Capital closed a $5.3 million senior bridge loan to refinance four loans secured by five multifamily investment properties totaling 166-units in Chicago, IL. The sponsor, a local Chicago multifamily owner and operator, had acquired the distressed assets several years ago. Due to a poor relationship with a prior partner, the sponsor had been unable to execute on the business plan and stabilize the properties.
Bloomfield utilized extensive local market expertise to understand the potential of each asset. In addition to the refinance, the senior bridge loan also funded a capital improvement reserve and the sponsor plans a full renovation of each property. The sponsor hired a new third-party property management firm to handle all property management and leasing, as well as, a new general contractor to complete the renovations.
Chicago, IL Multifamily Purchase: Quick Closing
Bloomfield Capital provided a $4.4 million senior bridge loan to facilitate the acquisition and renovation of a 68-unit apartment complex located in Chicago, IL. The sponsor had been working with an agency lender to finance the acquisition, however, the lender chose not to pursue the transaction as occupancy fell to 85% immediately before closing. Bloomfield’s bridge loan allowed the sponsor to acquire the asset in a timely fashion and also provided the capital necessary to renovate the investment property.
As a direct lender, Bloomfield was able to structure, underwrite and close this bridge loan in under three weeks, thus providing the sponsor the competitive edge necessary to differentiate themselves from other bidders.
The sponsor was able to immediately renovate units, increasing occupancy to 95% and ultimately refinanced Bloomfield’s bridge loan in under 6-months.
Chicago, IL Office Refinance: Note Purchase and Modification
Bloomfield Capital closed a $8.3 million senior bridge loan to facilitate the note purchase and loan modification that amounted to a discounted payoff of debt secured by two office buildings in Illinois. The Sponsor owed approximately $12.0 million on the assets and secured a $6.625 million discounted payoff, representing a 45% discount from the current balance. The sponsor sought Bloomfield to acquire the notes at the discounted price and restructured the debt allowing them the time necessary to stabilize the assets. Additionally, Bloomfield funded $1.0 million for tenant and capital improvements at the properties.