T
he Habitat Company has secured outside investment to maintain control of its Columbus Plaza apartment tower on Wacker Drive after a significant loan maturity. The property's value was impacted by rising property taxes and higher interest rates, creating a $20 million gap between the previous $90 million loan and the new $70 million refinancing debt. Northmarq provided both loans, which were sold to Freddie Mac.

    An unidentified outside investor covered part of this gap, but not all, allowing Habitat to retain a majority stake in the property's equity. This deal is one of several challenges faced by Chicago multifamily players, including large foreclosure lawsuits and tight capital markets. Some owners have opted for deed-in-lieu of foreclosure or sold properties at a loss.

    The Columbus Plaza property was affected by both annual tax increases and a proposed $300 million city tax hike that was later dropped from Mayor Brandon Johnson's budget plan. Habitat's investment partner initially planned to cover the entire debt gap but reduced its commitment due to concerns about the tax increase. The annual tax bill for the property rose nearly 42% between 2018 and last year, and it could face another significant increase due to a higher assessment value.

    Multifamily players have criticized Cook County Assessor Fritz Kaegi's valuation methods, which they say deter investors from the area. Habitat may appeal the assessor's valuation this year, having successfully reduced its tax bill in previous years. However, the appeal process can be unpredictable, and county leadership has called for reforms to make it more efficient and transparent.