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208 S. LaSalle St. Gets $47M Refinance

CHICAGO—Commercial real estate assets like this repositioned office property are generating a lot of interest from capital sources.

By Brian J. Rogal | brianjrogal | | Updated on July 14, 2016

 

chi-208LaSalle (2) 208 South LaSalle Street
CHICAGO— Sonnenblick-Eichner Co. has arranged a $47.5 million first mortgage loan to refinance the maturing debt on the office and retail component of the iconic 208 South LaSalle Street. Chicago real estate veteran Michael W. Reschke transformed the 1.1 million square foot structure into a modern, mixed-use building with a 610-room luxury hotel, and this latest refinance makes it clear that such assets have become quite attractive to capital sources. Reschke, the founder and chairman of The Prime Group, Inc. , converted the lower 12 floors of office space into a JW Marriott hotel, and repositioned the rest of its office space. The new loan is secured by the next five floors of office space totaling 207,953 square feet and 11,379 square feet of street level retail space, which is collectively 94% leased. The hotel component, as well as the top four office floors, were not part of the collateral. David Sonnenblick , a principal with Beverly Hills, CA-based Sonnenblick-Eichner, gives a lot of credit to the work done by Reschke. “This resulted in tremendous accretive value in the asset, resulting in our ability to generate tremendous interest in the financing opportunity from multiple capital sources.” The seven-year, non-recourse financing was funded by an affiliate of Guggenheim Commercial Real Estate Finance . “There is tremendous capital available today for well-thought out commercial real estate assets with strong sponsorship,” adds Elliot Eichner , also a principal of Sonnenblick-Eichner, “This loan refinanced a $35 million mortgage that was a part of a $321 million facility we arranged for the ownership two years ago. That was a very complex structure, comprised of four different loans and included first mortgage debt and mezzanine financing.” Built in 1914 as the headquarters for the Continental and Commercial National Bank, the Daniel Burnham-designed building was added to the National Register of Historic Places in 2007.

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