Market Insights

Chicago’s Largest Construction Loan Goes to Luxury Project Vista Tower

The Windy City may not be able to claim quite as many trophy buildings as the Big Apple or quite as much of the financing that makes those buildings possible, but, all the same, Chicago is seeing some pretty high-profile real estate action this year.

Take the 94-story luxury condominium and hotel development project called Vista Tower, which broke ground last year. China’s Ping An Bank issued a $700 million loan this quarter to the project’s developers in what is believed to be the largest construction loan ever issued in Chicago, the Chicago Tribune reported last week. The report named the developers as Chicago-based Magellan Development Group and Dalian Wanda Group, Magellan’s investment partner and one of China’s largest commercial property companies.

The core of Vista Tower is located at 363 E. Wacker Drive, and the $1 billion project which includes 406 units in the condo development and 190 hotel rooms is expected to be the third-tallest building in Chicago when it’s completed in 2020, the Tribune reported.

Another prominent Chicago property that received financing this year was Willis Tower, the Blackstone-owned iconic skyscraper formerly known as the Sears Tower because it was built in the early 1970s as a central office space for Sears Roebuck and Company.

Goldman Sachs led a syndicate including Bank of America and Citigroup in the $1.02 billion financing of the 110-story office tower at 233 South Wacker Drive, as reported in the Q1 2017 CrediFi Lending Spotlight on Chicago.

Going back a little further, Morgan Stanley, along with Bank of China and Barclays, issued a $675 million loan in September 2016 (most of which was securitized) for a former wholesale warehouse owned by real estate investment trust Vornado. It’s an unusual property in Vornado’s portfolio in that it is located outside New York and Washington, D.C., the REIT’s primary markets.

Merchandise Mart, at 222 Merchandise Mart Plaza, is a 4.2 million-square-foot, 25-story art deco building on the northern bank of the Chicago River that takes up two city blocks and is one of the world’s largest commercial buildings.

Built in 1930 by Marshall Field & Co. and renovated in 2007, Merchandise Mart started out as a wholesale design center – a warehouse and showroom center for architectural and interior design vendors, effectively a shopping center with retailers as the consumers – and has also been the site of trade fairs, an international art fair and a retail shopping center called Shops at the Mart.

Vornado has rebranded the building as TheMART and is transforming it into office space whose tenants include technology and telecommunications businesses such as Motorola Mobility, Braintree, and startup incubators 1871 and Matter, as well as Fortune 500 corporations such as ConAgra and Caterpillar. TheMART, which has LEED Gold certification, still houses design showrooms.


To download the entire Lending Spotlight, click here.

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