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Acquisition Date: June 2006
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Status: Active
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Background
The property is a mixed use asset in Chicago’s Bridgeport neighborhood. We chose this neighborhood due to its proximity to downtown Chicago, below average rents, and creative community. We acquired the property via a broker that had it listed. We paid market value for the property based on price per square, but the rents were significantly below market. The neighborhood was teeming with creative people and a few art galleries and a coffee shop had opened, but most of the space was used as storage.
The property is a mixed use asset in Chicago’s Bridgeport neighborhood. We chose this neighborhood due to its proximity to downtown Chicago, below average rents, and creative community. We acquired the property via a broker that had it listed. We paid market value for the property based on price per square, but the rents were significantly below market. The neighborhood was teeming with creative people and a few art galleries and a coffee shop had opened, but most of the space was used as storage.
ESRE Approach
We had a high degree of conviction that we could lease the space to creative businesses based on the large open floor plans and high ceilings on the retail level. Our first loan came due in 2011, a difficult time to get financing, but we had created enough value up to that point to get a local bank to refinance our mortgage after the original lender was no longer making loans.
10 years after the acquisition we executed a cash-out refinance of the property of 2.3 times our initial equity
We had a high degree of conviction that we could lease the space to creative businesses based on the large open floor plans and high ceilings on the retail level. Our first loan came due in 2011, a difficult time to get financing, but we had created enough value up to that point to get a local bank to refinance our mortgage after the original lender was no longer making loans.
10 years after the acquisition we executed a cash-out refinance of the property of 2.3 times our initial equity
WHY ESRE
1Midwest Undervalued Markets
Targeting growing Midwest markets with favorable demographic trends and less competition but more favorable purchase multiples than other US Markets |
2Data Driven Strategy
Proprietary data science algorithm to forecast market rents and inform our target market and underwriting processes |
3Management & Operational Experience
Leverage proven experience managing and rehabbing multifamily properties to mitigate risks and scale operations |