TODAY’S DEALS: HFF Lands $118M for K2 Chicago

HFF provides $118 million to The Georgetown Co.; Senior Housing Properties Trust to complete a massive portfolio buy; and Essex Realty Group brokers the $2.7 million sale of a historic property in Chicago.

K2 Apartments email (1)Chicago—HFF has released details on financing it arranged for The Georgetown Co.’s recent acquisition of K2, a 34-story Class A residential tower in Chicago’s West Loop. Working through Freddie Mac’s CME Program, HFF was able to secure $118 million, 10-year, fixed-rate financing for the 496-unit property. HFF is certainly familiar with the asset, as it arranged the original construction financing for on behalf of developer Fifield Cos.

The HFF debt placement team representing the borrower was led by managing director Danny Kaufman, senior managing director Mike Kavanau and managing director Steve Skok.

Based in New York, The Georgetown Co. is a private-held diversified real estate developer and owner. The firm intends to make various improvements to the K2, including upgrades to public spaces and amenities. The property is currently 96 percent leased.

“The West Loop is one of Chicago’s fastest growing residential, entertainment and employment centers,” says Adam Flatto, CEO of The Georgetown Co. “The opportunity to participate in the growth and energy in the West Loop and Fulton Market districts attracted us to this property.”

Senior Housing Properties announces plans for  massive buy

Newton, Mass.—Public REIT Senior Housing Properties Trust will be expanding its portfolio to the tune of $790 million. If all goes according to plans, the Massachusetts-headquartered company will acquire 38 communities from CNL Lifestyle Properties. The $790 million approximate acquisition price includes the assumption of debt.

The portfolio totals 3,466 units and breaks down to 826 independent units, 1,860 assisted living units, 744 memory care units and 36 skilled nursing beds. As of November 2014 the properties were 93 percent occupied. Eighteen of the 38 communities, with 1,847 living units, are currently leased to six senior living operators, none of which are currently SNH tenants. The remaining 20 communities, with 1,619 living units, are currently managed by six senior living operators (including one manager who also leases), none of which are currently SNH managers.

Assets are located in California, Georgia, Washington, Oregon, Alabama, Arizona, Colorado, Florida, Indiana, Montana, Missouri, North Carolina, Rhode Island, Nevada, Illinois, and Arkansas.

“We are very pleased to acquire such a high quality portfolio of private pay senior living communities,” says David Hegarty, president and COO of Seniors Housing Properties Trust. “In 2014, SNH has made great strides towards diversifying its tenants and upgrading the quality of its portfolio. Upon closing of both the acquisition of these 38 communities as well as our previously announced acquisition of 23 medical office buildings, approximately 56 percent of SNH’s consolidated net operating income will come from senior living properties and approximately 44 percent will come from medical office buildings; in addition, rents from our largest tenant, Five Star, will account for less than 20 percent of our annualized revenues.”

The capitalization rate for the acquisition of the 38 senior living communities from CNL Lifestyle Properties is expected to be in excess of 7 percent per annum based on 2015 estimated GAAP net operating income.

Essex Realty Group brokers $2.7M sale of historic property in Chicago

DakinChicagoEssex Realty Group Inc. announced the sale of 932-40 W. Dakin St. in Chicago.

932-40 W. Dakin St. is a 26,815 square foot heavy-timber warehouse building that was originally constructed in 1914 by the E.R. Moore Co., a nationally known manufacturer of caps and gowns used for graduation and choir ceremonies. A preliminary investigation from a historic tax credit advisor indicated that the building may be a candidate for the National Register of Historic Places which may qualify a new buyer to receive Federal rehab credits for renovation work. The building spans three floors and has high ceilings and hardwood floors on the 2nd & 3rd floors. There is currently room for eight off-street parking spots with the possibility of adding more off the alley at the rear of the building.

The building is situated on the north side of Dakin Street just east of Sheridan Road and is three blocks north of the world famous Wrigley Field. The property offers many public transportation options right around the corner. In fact, the Sheridan Red Line “L” stop is just steps away. This is a rare opportunity to conduct a ground-up new residential development or convert the existing structure into luxury loft-style apartments or condominiums in one of Chicago’s most desirable neighborhoods with excellent access to public transportation.

The sale price was approximately $2,700,000. Essex Realty Group’s Jim Darrow and Jordan Gottlieb represented the seller and Doug Fisher represented the buyer.


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