Mesa West Capital has originated a $210 million refinancing loan for the Chicago-based real estate investment firm Hearn Company at the Windy City’s John Hancock Center.
The five-year, non-recourse loan will be used to refinance current debt and for ongoing leasing and capital costs. The financing included $35 million of mezzanine debt that was placed with an institutional investor at closing.
The sponsor will use a portion of the new funds to spruce up the office and parking spaces and to improve and rework the building’s Michigan Avenue Plaza in the future.
In 2013, Hearn acquired the 894,000 sq ft of office space and 710-car parking garage in the famous 100-story skyscraper located north of Chicago’s Loop. Since then, Hearn has already completed capital improvement projects at the 875 North Michigan Avenue building such as replacing the mechanical systems, renovating entries and lobbies on Chestnut and Delaware streets, and constructing a new 13th floor lounge, fitness center, and conference center.
“Hancock Center is an iconic asset that has been successfully repositioned by Hearn and our financing will facilitate the completion of Hearn’s business plan,” said Matthew Snyder who originated the financing out of the firm’s Chicago office.
The office space is currently 85 percent leased by the global marketing firm Interpublic Group.
In June 2015, Mesa West Capital opened a Chicago branch to support its growing lending in the Midwest. This year, the firm has originated over $600 million in short term debt for the acquisition and/or recapitalization of commercial, industrial and multifamily assets in the Chicagoland area, including a $220 million loan to Sterling Bay on 1K Fulton, home to Google’s regional headquarters.
John Parrett and Bill Howe at CBRE arranged the financing.
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