CBOT Homeowners Refinance With $ 256 Million Loan

The owners of the Chicago Board of Trade Building couldn’t find a buyer for the Loop monument last year, but they provided for a salary by refinancing the property instead.

A joint venture between Chicago-based developer GlenStar Properties and Los Angeles-based private equity firm Oaktree Capital Management has taken out a $ 256 million loan on the property at 141 W. Jackson Blvd., according to a company statement. of Jones Real Estate Services. Lang LaSalle.

The new mortgage is worth nearly $ 70 million more than the debt it replaces, allowing homeowners to take advantage of the growing value of the 44-story tower without selling it. The refinancing approach has appealed to many downtown office owners, who can pocket a profit on the value of a building without paying a capital gains tax associated with a sale.

Not that they didn’t try to unload the 90-year-old building. GlenStar and Oaktree put the property up for sale almost a year ago for around $ 330 million, according to people familiar with the offer. It would have eclipsed what it was valued in recent years: When the building last refinanced with a loan of $ 177.7 million in May 2017, it was valued at $ 275 million, according to a Bloomberg report linked to the loan. . The total debt on the property last month was $ 187 million, according to the report.

With a high asking price in the middle of a slow 2019 for commercial property sales in Chicago, the building has not been traded. But the size of the new loan suggests that its value has increased significantly.

It is not known how much the building was valued as part of the refinancing, and a spokesperson for GlenStar could not be reached immediately.

The loan reflects both homeowners’ renovation and rental efforts in the building and investor confidence in the downtown office market. Businesses moved into more office space last year than any year since 2007.

The property was 23% vacant in September, according to the Bloomberg report, a share significantly higher than the 13.7% average for downtown office buildings at the end of the year. But the occupancy rate is much higher than in 2012, when a GlenStar company paid $ 152 million for a then half-empty building.

New tenants in recent years include engineering design firm Talman Consulting, insurance company Resolute Management, and third-party logistics company BlueGrace Logistics. Groupe CME is the building’s largest tenant with approximately 148,000 square feet.

GlenStar and Oaktree plan to add to this list. Part of the new loan will be used for future leasing, according to the statement from JLL, which represented the owners in the refinancing.

The property reported net operating income of $ 7.2 million in 2018, out of around $ 30 million in revenue, according to the Bloomberg report.

The Art Deco Tower known for its auction pits was built in 1930 and was Chicago’s tallest tower until 1965, when it was supplanted by the Richard J. Daley Center. The CBOT building was designated a Chicago Landmark in 1977 and listed on the National Register of Historic Places in 1978.

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