Northwind Group Secures $58.5 Million Loan for Chicago Office Building Acquisition

Northwind Group, a notable real estate private equity firm based in Manhattan, has recently disclosed a substantial financial maneuver involving a first mortgage acquisition loan amounting to $58.5 million. This financing is specifically allocated for the acquisition and revitalization of a major office property situated in Chicago's Central Loop. The property in question is an impressive 22-story building located at 175 West Jackson Boulevard, spanning over 1.4 million square feet and including a 240-space parking garage.

The loan structure features an initial advance of $33.5 million, translating to $24 per square foot, provided at the closing of the deal. In addition, there is a reserved sum of $25.0 million earmarked as a 'good news' facility intended to finance future leasing costs that could contribute to the property's value appreciation.

A joint venture between 601W Companies and David Werner Real Estate Investments acquired the property, entities with which Northwind has a trusted relationship through previous financing deals. This acquisition is particularly noteworthy as it reflects a dramatically recalibrated purchase price—approximately 85% less than what Brookfield previously paid for the property. The price adjustment is facilitated by extensive renovations and modern enhancements that have been made to elevate the building's appeal, utilizing over $24 million in capital improvements under prior ownership.

These renovations include the construction of a new amenity center and the introduction of an attractive rooftop space on the 22nd floor. Given these factors, the building is well-positioned to attract demand from large, format tenants within the Chicago Central Business District.

David Werner, speaking on behalf of the joint venture, articulated enthusiasm about the acquisition's alignment with their investment philosophy of targeting high-quality assets located in prime markets for a reset basis. He also expressed gratitude towards Northwind Group's teams for their swift and thoughtful handling of the transaction.

Ran Eliasaf, founder and managing partner at Northwind Group, shared his excitement about continuing and expanding their collaboration with the sponsors. He highlighted the strengthening institutional interest returning to the Chicago office market, alongside an uptick in leasing activities. Acquiring a top-tier property at an attractive entry point, combined with dedicated capital for leasing and tenant improvements, ideally positions the asset for renewed success.

Eliasaf further noted the importance of experienced operators in capturing new tenants in the changing landscape of the office market. He underscored the previous success of this sponsor group with Northwind's financing for a different Chicago office building, 303 East Wacker, where they managed to lease over 125,000 square feet within just a year of acquiring the property.

About Northwind Group

Founded in 2008 by Ran Eliasaf, Northwind Group specializes in managing real estate private equity and debt fund investments. They focus on credit investments through discretionary, closed-ended debt funds and have successfully executed real estate transactions totaling approximately $9.0 billion across more than 400 properties, including healthcare facilities, throughout the United States.

About 601W Companies

601W Companies is a leading name in real estate across America, involved in the acquisition, ownership, development, and management of significant commercial properties. Over the last 25 years, they have amassed a portfolio of substantial and well-recognized properties, totaling over 45 million square feet.

About David Werner Real Estate

With over 40 years of experience in commercial real estate investing, David Werner has established a solid standing in both office and residential markets in major cities like New York and Chicago. His longevity and success in the sector are well noted across the industry.

This strategic financial move signifies not only the trust between Northwind and its partners but also the growing confidence in the Chicago office market's recovery and vitality as it navigates the post-pandemic era.