Daniel E. Rosenberg
198-Unit Luxury Apartment Building
Avra is a newly constructed, 198-unit luxury apartment building in Chicago’s West Loop neighborhood. Avra features a state-of-art amenity package including a 24-hour fitness center and yoga studio, sky lounge, coworking spaces, and a wrap-around rooftop terrace offering panoramic city views. In-unit features include keyless entry, ceiling spans of up to 12-feet, peninsula kitchens, floor-to-ceiling tinted windows, wide-plank flooring and Ecobee smart thermostats. Avra offers thoughtfully designed layouts comprising of studios along with one-, two-, and three-bedroom units.
Avra is strategically located in Chicago’s West Loop, one of the nation’s most rapidly developing neighborhoods and most desirable places to live, work, and play in Chicago. The Property benefits from having maximum visibility along Interstate 290 and immediate proximity to both the Illinois Medical District and the University of Illinois Chicago (UIC), two of the largest employers in Chicago. The Property’s location serves as a gateway to the West Loop while offering residents a host of public transportation options including the CTA Blue Line and several bus routes providing convenient access throughout Chicago’s urban core. Additionally, a multitude of retail and dining venues can be found within minutes of the Property including a full-sized Target located across the street.
With initial move ins beginning in April-2021, Avra experienced exceptional leasing momentum and was over 90% within a couple of months after initial move ins took place.
The Sponsor needed a bridge loan to get through lease up and pay off the existing construction loan and preferred equity. BWE was able to assess the market and contacted over 75 banks, debt funds, and life insurance cos. The deal was well received in the market as a result its prime location, strong sponsorship, Class A vintage, and proven demand demonstrated through the Property’s successful lease up.
Ultimately, BWE was able to place a 3-year, fixed rate loan at the target proceed amount with a life insurance company to pay off the existing debt and preferred equity. The fixed rate option allowed the borrower to lock in a competitive rate that would not be subject to future rate increases.
From the date the loan was rate locked to the date the loan was closed, interest rates and lender spreads had increased significantly. Fortunately, BWE and the borrower were able to lock in a fixed during a volatile interest rate environment.
As a result of Cook County’s current tax reassessment process and the uncertainty of future tax increases, BWE was able to get the selected lender comfortable with accepting the appraiser’s concluded tax number instead of the county’s first pass tax assessment.
Because of going to market during the Property’s initial lease up, cash flow was artificially suppressed due to heavy concessions that were provided as a result of first generation leases and the state of the market in early 2021.