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High Rise Evanston, IL. Apartment Complex Acquired by Crossbeam Capital, Concierge
Asset Management Partnership

Skyline at Evanston, 17-Story, 221-Unit, Class A
2-Year old Building With Chicago, Lake Michigan Views, To Get Array of Enhancements, Value Rents

Crossbeam/Concierge Partnership Chosen From Dozen-Plus Bidders For Non-Performing Loan

EVANSTON, IL (May 17, 2010) –Skyline at Evanston, a two-year-old 17-story, 221-unit apartment community heading for foreclosure, has been acquired by an investment partnership managed by Crossbeam Capital, LLC of Bethesda, MD and Concierge Asset Management of Houston, TX. Sale price was not disclosed.

The Class A building, located at 415 Howard St., was completed in 2008, by Bill Walsh, president of Bristol Chicago Development. However, Mr. Walsh suffered an accidental death and Bristol could not meet the loan payments on its $43 million debt obligation to lenders PNC Bank, NA of Pittsburgh and Banco Popular, Miami. Skyline cost $58 million to construct.

A notice of default on the loan was filed, and the building was 45 days from foreclosure when it came it to the attention of Crossbeam/Concierge. But it met all the criteria of the Crossbeam-managed Workforce Housing Fund I partnership, said Brad Blash, chief acquisitions officer for Crossbeam.

“We look for institutional grade apartment buildings that have quick access to transportation and retail, where we can enhance the lifestyle for the resident,” explained Blash.

In Market for More Chicagoland Apartment Properties
Tom Cabibi, director of acquisitions for Concierge, said Skyline is the first—but not the last—purchase in the Chicago area market. “While we have $1 billion of challenged assets in our acquisition pipeline, most are bank and lender real estate owned and non performing loans on problem properties. None are in the Chicago area where, because of management efficiencies, we would like to be buying more apartment communities,” he said.

Skyline is a half block from the elevated Chicago Transit Authority railway station and across the street from the Gateway Center shopping mall. The high-rise building has seven-foot high windows and unobstructed 360 degree views of either Lake Michigan or Chicago. It’s also close to Northwestern University, Loyola University, the St. Francis Medical Institute and major employers including Kraft Foods and Abbott Labs.

Crossbeam/Concierge moved quickly on the opportunity to buy the note. “The loan was moving down the path toward foreclosure and upwards of a dozen potential buyers were interested,” recalls Blash. We felt confident from our deep-due diligence on Skyline, that if our partnership made the best bid and we were completely up front with the lender on how we evaluated the property and could make needed repairs cost effectively, we could be the buyer-of-choice.”

Created a Solution for the Lender
Blash said Crossbeam/Concierge created a solution for the lender by identifying problems in the building that could be repaired by Concierge’s in-house construction team at a cost below their competitors’ bids and way below the prices charged by outside engineering companies. “This strategy enabled the lender to avoid a significant reduction in the selling price,” he noted.

The Skyline acquisition was a shrewd investment, said Bill Bennett, a lecturer in real estate at the Kellogg School of Management at Northwestern University and president of Iconic Development, a multifamily developer in the Chicago market. “Long term, Evanston is a great market for owners because new apartments is hard to deliver today and there is a significant pent-up demand for rental housing.

“Crossbeam/Concierge is buying an institutional quality asset in an extremely supply constrained market,” added Bennett.

Strong Support from City of Evanston
The buyers had strong support from the City of Evanston led by Ann Rainey, 8th Ward Alderman who is also providing leadership on the Howard Street Corridor Revitalization.

“Bill Walsh had the vision to build a 17-story apartment community on a lot that was vacant for a century,” said Alderman Rainey. “Now, Crossbeam Capital and Concierge Asset Management—with their experience—are the right team to carry on Bill’s legacy and we look forward to working with them.”

Skyline was designed with 13 stories of apartments above four levels of controlled garage parking with 245 spaces. The 221 residential units include 26 studios, 143 one-bedrooms and 52 two-bedrooms. The average apartment is 833 square feet and all but 13 studios have private balconies. Rents start at $1175 a month, a value below similar rental units in downtown Evanston. Concierge’s Property Management Company will have a Leasing and Resident Service office in the lobby. The community is 65% occupied.

Although the apartment complex is only two-years old, Concierge plans a comprehensive $2.2 million program of upgrades, improvements, environmentally sensitive and energy efficient changes and deferred maintenance repairs. “We’re building on Bill Walsh’s foresight to create a dramatic Class A high rise lifestyle that has real value for the residents,” said Barbara Moffitt, Chicago regional manager for Concierge.

Moffitt said the top two floors will be converted into penthouse levels, a new 24-hour Cyber Café for residents will be created, the common areas including the resident clubroom will be utilizing environmentally friendly ‘green’ flooring to provide a better living experience for the residents.

New above-the-range microwave ovens with vent hoods are being installed in all of the units and hard-surface flooring will be available in selected apartments. Residents can choose accent designer colors on specific walls.

Energy Efficient, Environmentally ‘Friendly’ Upgrades
The buyers have “conducted an extensive energy audit and in-depth due diligence throughout the building and its systems and we are looking for cost-effective ways to enhance the efficiency, sustainability and health of Skyline and its residents,” said Robert Bryant, vice president of Concierge Construction. “We will install a more efficient heating and air conditioning system and insulate exterior walls on all apartments designed to reduce energy costs for residents. New recyclable carpet squares that meet rigid environmental standards will replace the hallway carpeting on the penthouse floors and in the elevator foyers of floors five to 17.

Plus planters with live foliage will be added to the façade. “What we’re doing is making Skyline look more inviting, more residential by warming it up wherever possible with color, plantings and a new contemporary signage program. At first glance, the high rise with its clean architecture may look like a commercial office building. We want to change that perception,” added Bryant.

Summed up Brad Blash of Crossbeam: “We had a great experience working with the sellers on this transaction which we view as a win/win for the banks that held the note, for the City of Evanston, for our investors and current and future residents. Our goal is to provide welcoming, luxury living and responsive on-property service to residents at a competitive monthly rent.”