Bender Companies’ value creation strategy is strengthened by debt and equity partnerships

Chicago-based Bender Companies has increased its investments in multifamily properties over the years through a series of loan and equity transactions.

Bender’s commitment to hands-on management to improve the rental housing business became the primary focus of its long-term growth strategy in 2018. The multifamily owner and operator recognized then that it needed a partner that could enhance the company’s ability to operate and maximize value for its investor partners.

When Bender management wanted to significantly expand its portfolio, it turned to the private capital experts at JLL in Chicago.

“We wanted a full-service capital markets partner to help us navigate investment opportunities,” said Kurt Bender, founder and CEO of Bender Companies. “At the same time, we wanted to work with a lending partner that would take the time to show us a range of lending options and provide the service we need to be competitive in this space. JLL was exactly that.”

Finding the best financing solutions in a tight market

Bender Companies was looking for value-add opportunities in the garden-style workforce housing sector throughout the Midwest. As the company expanded its ownership in late 2018 and 2019, its directors and executives increasingly began to look for larger acquisition opportunities above the $20 million mark.

“We were looking for poorly managed and undercapitalized deals where we could come in with fresh capital, revitalize the property and increase NOI,” Bender noted. “By 2021, our equity relationships grew, allowing us to do larger deals and higher volume that required larger equity checks.”

But timing was critical when it came to debt financing – especially given high interest rates and general economic volatility. Bender’s interest rate cap on a key bridge loan expired in September 2023, and the company strategically needed to refinance before that deadline. The owner-operator managed to do so five months in advance by tapping JLL’s Private Capital Group.

Two of the many solutions offered were interest rate reductions to increase loan proceeds and ongoing analytics to monitor progress in stabilizing the business. Thanks to JLL’s key role in capital markets, Bender was able to secure a 7-year loan from Fannie Mae with two years of interest-only payments at a favorable interest rate of 4.99%.

Long-term debt and equity relationships

On the equity side, JLL’s private capital experts helped establish a key connection with a Florida-based private equity firm. Bender Companies has since completed seven deals with the firm, raising more than $50 million in equity to date.

On the debt side, JLL has arranged a number of acquisition and refinancing loans for Bender over the past five years, with the most notable transaction being the two-year bridge loan raised in 2021 at Secured Overnight Financing Rate (SOFR) +300. JLL secured the acquisition loan from Fannie in May 2023 and consulted with Bender every month to provide analysis through the closing date.

This enabled Bender to complete a small cash-out refinance in an extremely difficult credit environment while increasing the value of its real estate investments.

Paving the way for shared future growth

Since its founding and first deal in 2011, Bender Companies has built a track record of high-performing multifamily investments through strategic acquisitions, risk mitigation and effective management.

By adopting JLL’s relationship-driven approach to debt and equity solutions, Bender has been able to deliver better outcomes for the firm’s residents and investment partners. These transactions underscore the potential that can be unlocked when an entrepreneurial real estate investment firm partners with the country’s leading capital markets facilitator.

“The collaboration was beneficial for both sides,” said Bender. “We look forward to further successful transactions in the future.”