Eastern Union, one of the United States’ leading commercial real estate finance firms, has arranged a USD 15,918,000 acquisition and construction loan for the conversion of a former assisted living facility into a 246-unit multifamily property located at 500 Centennial Drive in East Peoria, Illinois.
The financing was arranged by senior loan originator Joe Siegfried of Eastern Union. The borrower was The H&A Group of South Bend, IN, a real estate investment and development company focused on value-add and adaptive reuse opportunities across multiple asset classes. The loan was provided by Genesis Capital, which is based in Sherman Oaks, CA.
Originally constructed in 1984, the property totals approximately 212,374 square feet in size on a 23.4-acre parcel of land. The site has 206 parking spaces.
It will undergo substantial redevelopment from an assisted living facility – which is currently vacant — into modern multifamily housing. The project is located in the Centennial Drive corridor of East Peoria, a growing market with increasing demand for residential rental inventory.
The transaction included both acquisition and construction financing and represented approximately 85% loan-to-cost. The three-year financing carried an interest-only structure for the full term. The loan also carried no prepayment penalty and an interest rate of SOFR plus 500 basis points.
“The key to this transaction was securing high-leverage financing in a secondary market while still achieving favourable loan terms. We were able to structure 85% of the total project costs along with an aggressive rate and a full 36-month interest-only term, creating meaningful flexibility for the sponsor as they execute the conversion strategy,” said Mr Siegfried.
“The full gut renovation will reposition the asset into market-rate multifamily housing designed to meet growing regional demand,” he added.
Planned improvements in the property include a swimming pool, new kitchen appliances, upgrades to cabinets, closets and countertops, HVAC improvements, and other renovations.
Talking about Eastern Union, the national commercial real estate firm employs more than 90 real estate professionals, with the proven track record of closing billions of dollars’ worth of transactions annually. Eastern Union leverages its relationships with lenders and its marketplace knowledge to secure the best available rates and terms.