The Company

Midwest Properties Illinois LLC

This Illinois based multifamily property consisting of 153 apartment units in 14 buildings, 11 condo units in a separate building, and an owners residence, recently emerged from chapter 11 and was operating under an approved plan of reorganization. The payment structure approved by the court left little cash flow to properly maintain the property, the operation was losing tenants, and the relationship with the senior lender was strained due to the bankruptcy.

The Challenge

The facility needed several million dollars in capital expenditures that, when factored in to an acceptable cap rate, resulted in a purchase price far below the debt on the properties.

The Process

Equity Partners was retained to refinance or sell the properties reaching out to numerous lenders and potential buyers.

The Solution

Equity Partners had over 25 groups conduct their due diligence and received 4 offers. The owner decided to move forward with a negotiated sale to a local real estate investor based on a short sale agreement negotiated with the senior lender. Several days before closing it was discovered that there were more than double the number of vacancies than identified 23 days prior. This resulted in intense last minute negotiations with both the buyer and the lender to come to a selling price that would allow the closing to move forward.