Barings has stepped in with a sizable new loan on the Loop office tower at 161 N. Clark, a level of financing that real estate watchers say is unusually large for downtown Chicago in the current market. The deal stands out in a city where big lenders have mostly been sitting on their hands when it comes to large office loans.
As reported by Crain's Chicago Business, the Barings loan underwrites the 50-story property at 161 North Clark and counts as one of the few major first-mortgage commitments to a Loop office building this year. Crain's described the transaction as effectively breaking a drought of deep-pocketed lenders willing to back big downtown office deals.
Building Basics And Who Is Inside
The tower at 161 North Clark, commonly known by its address in marketing materials and in the leasing world as a 50-story office building, carries sustainability credentials along with a full slate of tenant amenities. The building web site identifies 161 North Clark as a 50-story office tower, and Cook County records show the county itself as a major tenant with a multi-floor lease renewal this year.
That public-sector anchor, combined with recent renewals and expansions by law firms, has helped keep the tower better occupied than many of its downtown peers. Market reports have pegged the building in the high-70s to high-80s percent leased, a relative bright spot in a choppy Loop office scene.
Where The Building Has Been Since The Loan Troubles
The building’s debt ran into trouble in prior years, and an affiliate of France's Societe Generale moved to foreclose on the maturing mortgage before ultimately taking control of the property, according to reporting on the building's sale process. The Real Deal has also reported that the asset drew interest from buyers looking either to reposition the tower or to buy it out of the bank's portfolio, a signal that private investors are circling high-quality Loop office assets even as distress lingers.
Why Lenders Mostly Sat This One Out
Banks and traditional lenders have been cautious about big downtown office loans, thanks to higher interest rates, murky leasing demand and a run of high-profile distress cases. The result has been a noticeable drop-off in large first-mortgage originations across many central business districts, Chicago included.
Even so, a few selective financings have crossed the finish line in the city recently, including a mid-market first mortgage on an East Loop property that closed early last year. Deals like those show that lenders will still step in when they like the sponsor, the collateral or both, even if they are far choosier than they were a few years ago.
Legal And Ownership Background
Public filings and Cook County documents trace the maturity and default of the prior 230 million dollar loan and lay out a court judgment along with successor-in-interest listings tied to the property. Local leasing activity and a handful of tenant renewals helped the building maintain occupancy as the debt picture shifted, according to market reporting and county records.
Barings' new commitment gives the current owner, or a prospective buyer, breathing room to market the tower or invest in upgrades. It also underscores that nonbank capital managers remain willing to underwrite office risk on a selective basis. Barings has been active in similar financings in other markets as well, according to the firm's own press releases on recent transactions.
