2002 Transactions
Tremont Structures $62
Million Re-Capitalization of Chicago Office Tower
Tremont
Realty Capital recently structured a note purchase and loan
modification of the first mortgage debt on 550 West Jackson
St., Chicago, IL.
Dan Mee, Executive Director in the Boston
office and Mike Hart, Senior Director in the Chicago office,
successfully completed the assignment. The property is a
Class-A 407,000 sf, 18 story, glass office tower in the
West Loop business district of Chicago. The property was
recently re-developed into a Class A project from a 100,000
sf low-rise Class C office building. As the original construction
loan was coming due, Tremont worked with the sponsor to
identify alternative debt sources. The solution was to identify
a new investor to purchase the existing note and modify
terms providing both time and proceeds sufficient to complete
lease up of the building.
Mike Hart said, "We had a complicated
construction loan that was bifurcated into senior and junior
traunches held by separate lenders. Although the senior
piece was covered by existing leases, our client would have
had to dramatically increase his investment in the property
and provide additional guarantees to secure a renewal".
Dan Mee added, "this transaction had a lot of moving
parts with an A-B first mortgage, a mezzanine lender and
our client; all with slightly different motivations. We
understand that the current real estate capital markets
are complex, with capital sources having varying degrees
of risk/reward parameters. We took on this assignment knowing
we would be required to balance the needs of our client
with the realities of the capital markets. This represents
a good example of our expertise in providing creative solutions
in the structured finance arena." Tremont was successful
in identifying and structuring a non-recourse bridge loan
without requiring additional sponsorship support. Tremont
placed both traunches of the debt with a New York Based
mortgage REIT. The loan was recast as a new $62 million
first mortgage including a holdback for lease up expenses.
For additional information on this transaction,
please contact:
Michael Hart
Senior Director
Email: mhart@tremontcapital.com
Phone: 312.236.1162
