Woodfield Gardens

Rolling Meadows, IL

662 Units  •  Fund I  •  Sold 2013

Opportunity

In October 2010, The Davis Companies acquired a non-performing first mortgage collateralized by a 662-unit Class C apartment complex in suburban Chicago from a lender for approximately 55% of the borrower’s investment basis. The Davis Companies’ all-in investment was slightly over $54,000 per unit, which compared favorably to sales pricing of over $80,000 per unit at comparable rental properties in the market.

Overview

After acquiring the non-performing first mortgage, The Davis Companies was able to gain title to the real estate through a deed-in-lieu of foreclosure in January 2011. The property is situated in one of the best locations in suburban Chicago, at the intersection of Interstates I-90 and I-290/IL-53, adjacent to a recently constructed convention center and directly across the highway from the nation’s largest IKEA and the Woodfield Mall, a super-regional mall employing over 3,750 people.

In order to take advantage of this great location, The Davis Companies partnered with a local operator to bring professional management to the complex and undertake a significant capital improvement program.

Value Creation Strategy

The Davis Companies successfully executed targeted capital improvements that enhanced the image and economic occupancy of the property. The Davis Companies re-tenanted the property and brought occupancy from 55% leased upon acquisition to 98% leased. In September 2013 the property was sold well in excess of the initial investment.