$665M secured for Chicago tower
- Howard Hughes Corp. and Riverside Investment and Development have secured financing in the amount of $665 million for its 1.4 million-square-foot, $771 million office tower along the Chicago River, the Chicago Tribune reported.
- A Bank of America and JP Morgan Chase-led group of lenders has agreed to furnish almost $495 million in construction loans, and USAA Real Estate will contribute $169.6 million in preferred equity. Riverside has committed to a $10 million cash layout, while Hughes' equity investment in the project is $87 million, including the value of the land. In addition to its position as a lender in the deal, Bank of America will also move into a 500,000-square-foot space of a low-rise section of the 53-story high-rise after construction is complete, and the developers recently announced that investment bank Lincoln International will lease a 60,000-square-foot space there.
- Clark Construction will head up construction of the tower, which is scheduled for completion in late 2020. Even though the project is a late entry into the city's building boom, Riverside CEO John O'Donnell told the Tribune that he believes the 110 North Wacker property will benefit from a cycle that still has plenty of life in it.
Chicago, like many other major U.S. metros, has been crane-heavy for the last several years and has enjoyed the economic benefits that come with more property taxes and plenty of construction jobs.
But that doesn't mean city and taxpayer benefits end there. According to a Curbed Chicago report earlier this month, one of the conditions of project approval by the Chicago Plan Commission was that Hughes and Riverside commit to donating $15.6 million to the city's Neighborhood Opportunity Fund and $3.8 million to be split between a local improvement fund and Chicago's Adopt-a-Landmark program. In addition to being able to move forward with the project, Riverside and Hughes were also allowed to double the building's square footage in exchange for the contribution.
There are some, however, who are predicting that Chicago has seen the end of its boom years, at least for the time being. In December, Dodge Data & Analytics projected that 2017 data will shake out to show a 7% decrease in total construction starts in the city, compared to 2016. Dodge said 2018 would show an additional 3% drop.
For now, though, projects like 110 North Wacker, First Hotel Group's $100 million, 222-room hotel at Navy Pier and an "express transit system" between downtown Chicago and O'Hare International Airport promise to keep contractors busy.
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