Santefort Acquires $100M in Wisconsin Apartments
Santefort Real Estate Group has acquired two apartment complexes in Kenosha County, Wisconsin, for $100 million. The deal highlights an investment thesis treating the area as part of a "greater Chicagoland" ecosystem. The strategy targets markets with robust multifamily demand and suppressed new supply, creating upward pressure on rents.
- The two acquired properties, Fountain Ridge and Cobblestone Creek Apartments in Pleasant Prairie, total 426 units, and the deal was financed with a $66 million loan arranged by Berkadia. Kenosha County is part of a strong economic growth corridor, attracting major investments from companies like Uline, Haribo, Lilly, and Microsoft, which fuels housing demand. - Midwest multifamily markets are seeing renewed investor interest due to their consistent and stable demographics, with asking rents in some markets predicted to rise at a higher rate than the national average in 2024. This is partly because many Sunbelt cities are currently dealing with an oversupply of new apartments. - For the Chicago metropolitan area, multifamily cap rates were around 6.8% in the fourth quarter of 2024, with sales prices per unit averaging $207,556. The market is considered stabilized due to limited new supply and healthy demand, with over 10,000 units absorbed in the past year. - Professionals transitioning into real estate investment firms should focus on developing strong financial modeling skills, including building cash flow models, running sensitivity analyses, and understanding equity waterfalls. Common career pathways include starting in real estate investment banking, brokerage, or acquisitions roles at REITs. - Building capital for a first investment can be approached through various strategies, including saving, partnering with friends or family in a joint venture, or refinancing an existing property to tap into equity. Government-backed loans like FHA loans can also be a route for owner-occupant investors. - A significant wealth-building component of multifamily investing comes from tax advantages, such as depreciation, which allows investors to deduct a portion of the property's value from their taxable income annually. Investors can also defer capital gains taxes by using a 1031 exchange to reinvest the proceeds from a sale into a new property. - To stay current with industry trends and market analysis, real estate professionals frequently read publications like The Real Deal, GlobeSt.com, and the Commercial Observer. Newsletters such as CRE Daily and newsletters from real estate data firms also provide valuable, timely insights.
