Chicago-Area Community Commands $76M

A partnership between Eastham Capital and Bender Cos. has acquired Haven Hoffman Estates, a community in the Chicago suburb of Hoffman Estates, Ill. The 550-unit property will be renamed Hoffman Hills Apartments as part of the property upgrade.

Eastham Capital obtained a majority ownership in the community via Eastham Capital Fund VI, LP, its current fund. Eastham Capital’s co-investor and partner on a succession of projects, Bender Cos., is set to supervise the day-to-day management of the property.

This deal marks Eastham Capital’s ninth and largest purchase with Bender Cos. But the acquisition wasn’t without its challenges.

“From the date of PSA execution in late November to closing at the end of January, we saw a rise of interest rates of roughly 40 basis points,” Matthew Rosenthal, Eastham Capital founder and managing partner, told Multi-Housing News. “That negatively impacted our total loan proceeds by $2 million from when we first underwrote the deal, and increases the interest payment each month. While we never try to time the market, we unfortunately caught the upward trajectory of rates in the volatile interest rate climate of the past couple of years.”

To offset the rate increase, Bender was able to leverage its existing more than 5,000-unit portfolio of expense comparatives to assist in validating Eastham’s underwritten expense reductions at the Hoffman Hills property.

“They were able to share these with the lender and convince them based on history and competent operations, so that they could underwrite to a higher NOI, thus offsetting the decrease in total loan proceeds,” he added. “Additionally, performance at the property continued to improve while lease trade-outs averaged more than 11 percent on new move-ins and 8 percent on lease renewals, which will help in offsetting the increased monthly payment.”

Community details

Situated at 725 W. Bode Circle, Hoffman Hills Apartments borders the sprawling suburb of Schaumburg, roughly 30 miles northwest of downtown Chicago. The community was completed in 1970, and features 33 renovated and classic studios, 319 one-bedroom and 198 two-bedroom apartments.

Homes are located across 11 three-story buildings. Apartments feature walk-in closets, linen closets, window coverings and tile floors. Amenities include a fitness center, outdoor dining area, clubhouse, private work-from-home suites and a pool with a sun deck.

Currently 96 percent occupied, the community is in line for upgrades funded by a $6.5 million renovation budget part as part of the acquisition. Among the improvements, in addition to the rebranding, will be interior unit, exterior and amenity upgrades.

What’s nearby

Residents of Hoffman Hills Apartments seeking shopping can walk to the Colony Lake Plaza in three minutes, Salem Plaza in 11 minutes and Churchill Square in no more than a quarter hour. Parks and recreation spaces in the area include Northern Illinois Raptor Center, Spring Valley and Vera Meineke Nature Center and Ned Brown-Busse Woods Preserve and Stillman Nature Center, all reachable in 4 to 15 minutes by car.

St. Alexius Medical Center in nearby and Elk Grove Village is eight minutes away. In addition, the property is approximately 20 minutes away from the Chicago O’Hare International Airport.

Last month, Celadon Partners broke ground on a 147-unit senior housing project in the northern Chicago suburb of Deerfield, Ill. The community will cater to seniors earning between 50 and 80 percent of the area median income. Downtown Chicago is roughly 27 miles southeast.