Vornado Realty Trust has secured $675 million for the refinancing of downtown Chicago’s 3.6 million sq ft Merchandise Mart (MART) retail and office building, one of the world’s largest commercial buildings.
Morgan Stanley led the financing, which also included Barclays and Bank of China, sources confirmed.
The five-year, interest-only loan has a fixed rate of 2.7 percent that provided the trust with net proceeds of $124 million after repaying existing debt and closing costs, according to the borrower. Vornado purchased the MART from the Kennedy Family in January 1998 for $625 million.
The 25-story, art deco building at 222 West Merchandise Mart Plaza in the River North neighborhood in Chicago spans two city blocks and houses office space, wholesale showrooms and retail.
The MART was the largest commercial building in the world when Marshall Field & Company built the property in 1930, and it remains among the largest.
Among the Windy City’s top seven office submarkets, River North had the second highest average asking rent in Q2 of this year, with $38.37 per sq ft, according to Cushman & Wakefield.
Morgan Stanley held $2.18 billion in US real estate loans as of June 30, 2016, according to its latest SEC filing. Last month, the company teamed up with UBS on $200 million in loans to Wharton Properties for the refinance of a new commercial property in the SoHo neighborhood of Manhattan.
Vornado, a real estate investment trust, is the owner and manager of commercial real estate with a portfolio that is mainly located in the New York City and the Washington, DC area. Earlier this year, the trust also provided a $273 million refinancing on another historic commercial building: the Warner Building office property a few blocks away from the White House in Washington DC.