Noah Properties gets $62.5 million Walker & Dunlop pre-TCO loan in Buffalo Grove

Noah Properties has secured a $62.5 million lease-up loan for 945 Nanusha Residences, a 223-unit apartment building in Buffalo Grove, Ill. Walker & Dunlop Investment Partners originated the loan. Commercial Observer first reported the deal.

The property sits at 945 North Old Arlington Heights Road, roughly 30 miles northwest of downtown Chicago, and spans 231,970 gross square feet. Amenities include a courtyard, swimming pool, cabanas, an outdoor grilling area, a rooftop lounge with fire pit, a fitness center and electric vehicle charging stations.

The loan retires existing construction debt before the building receives its temporary certificate of occupancy (TCO), placing the takeout ahead of lease-up rather than after stabilization. Arrow Real Estate Advisors negotiated the transaction, with a team led by Morris Betesh and Jacob Petrovic.

Per Arrow, the refinancing carries an interest reserve through lease-up, funding remaining project costs and covering real estate taxes and insurance. A lender taking out construction debt ahead of TCO has no rent roll to underwrite debt service against, which is what the reserve addresses.

Petrovic, a director at Arrow, said in a statement that WDIP "stepped up on a pre-TCO takeout that materially reduces Noah's cost of capital." The loan carried the property through stabilization on one loan and closed in roughly 30 days from sign-up, he said.

CIBC's loan to SkyREM was sized off a full rent roll rather than a pipeline, per this publication's reporting, and Terra's Bay Harbor Islands office refi replaced $238 million of debt with $183.8 million on a building more than 90 percent leased. The Buffalo Grove loan is the reverse: the debt is in place before the income is, which puts completion and absorption risk on the lender rather than pricing it off in-place rent.