John Hancock Gets Big Refinance All News
Posted: January 19, 2016
CHICAGO—Mesa West Capital recently put its name on the map in Chicago when it provided Sterling Bay with $220 million to refinance its 1KFulton project in the West Loop, and it has now helped refinance another iconic office property. It has provided a partnership led by Chicago-based real estate investment firm Hearn Co. with $210 million in short-term first mortgage debt to refinance the office and parking components of the John Hancock Center. The financing included $35 million of mezzanine debt, which was placed at closing with an institutional investor.
In 2013, Hearn acquired the 894,000 square feet of office space along with a 710-car parking garage located within the 100-story skyscraper located at 875 N. Michigan Ave. on Chicago’s Magnificent Mile. Since acquiring the building, Hearn has replaced the mechanical systems, renovated the entries and lobbies on Chestnut and Delaware streets, and added a new 13th floor lounge, fitness center, and conference facility. It redesigned the common areas on each floor and redeveloped the bathrooms. And Hearn still plans to redesign the building’s Michigan Ave. Plaza.
The five-year, non-recourse loan will refinance existing debt and for ongoing leasing and capital costs. Interpublic Group, a global marketing firm, anchors the office portion of the building, which is currently 85% leased.
“Hancock Center is an iconic asset that has been successfully repositioned by Hearn and our financing will facilitate the completion of Hearn’s business plan,” says Matthew Snyder who originated the financing out of the firm’s Chicago office.
The financing was arranged by John Parrett and Bill Howe at CBRE.
As reported in GlobeSt.com, Mesa West opened a Chicago office in 2015 to support its increasing lending activities in the Midwest. This year, the Los Angeles-based portfolio lender has originated about $600 million in short-term debt for a variety of commercial, industrial and multifamily assets in the Chicagoland area. In addition to the Sterling Bay loan, the firm recently funded a $32 million loan for the acquisition of a four-building portfolio in Chicago’s North suburban office submarket.
Furthermore, the company provided $68 million in first mortgage debt to a joint venture of Prudential Real Estate Investors and GlenStar Properties for the recent acquisition of 311 W. Monroe St. The partners plan to reposition the building with a multi-million dollar capital plan and leasing campaign.
By Brian J. Rogal