Boutique Chicago Office Project Secures $31M in Financing
- Jan 25, 2021
Vista Property Group has landed $30.7 million in financing for its two-property office project in Chicago’s Fulton Market district. JLL Capital Markets arranged the financing for the property at 601-609 W. Randolph St. through Bank OZK.
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Vista will use part of the loan to conduct renovations to the five-story historic office building at 601 W. Randolph. Dating back to the 1890s, the building also includes 6,544 square feet of retail space that is fully leased.
The financing will also be used to fund the construction of 609 W. Randolph St., a 15-story boutique office building. The project was designed by Antunovich Associates and offers smaller floorplans with flexible layouts. The design also features pandemic-conscious elements like touchless interior features, smart restrooms and fresh air exchange. Amenities include a fitness room, a bike room, a business lounge, co-working space, two meeting spaces and a cafe/tenant lounge mostly located on the amenity floor at the top of the building.
Combined, 601 and 609 W. Randolph will offer 110,000 square feet of rentable space. The two office buildings also have high walkability scores and are located near a variety of transit options and amenities in downtown Chicago.
Senior Director Christopher Knight led the JLL Capital Markets team representing the borrower.
Subdued growth in Chicago submarket
Knight said in prepared remarks that the West Loop neighborhood offers mostly large towers, allowing Vista’s project to stand out as a modern boutique building. For Bank OZK, the Arkansas-based bank is interested in both smaller scale and large office towers in Chicago. In July 2020, the lender also provided $174.5 million in financing to Sterling Bay’s 47-story mixed-use tower at 300 N. Michigan Ave., roughly a mile away from Vista’s project.
However, recent activity in Chicago’s central business district has slowed down due to the COVID-19 pandemic, according to a JLL fourth quarter report. For the first time since 2012, the year-to-date net absorption in downtown Chicago was negative at 1.5 million square feet, leading the vacancy rate to increase to 15.8 percent. While market statistics are holding for the moment, the report noted that the Chicago office market’s future performance will depend on the COVID-19 vaccine rollout.