Beverly Hills, California, - Sonnenblick-Eichner Company has arranged a $47.5 million first mortgage loan to refinance the maturing debt on the office and retail component of 208 South LaSalle Street, a historic 1.1 million square-foot, mixed-use building in Chicago, IL.

208 South LaSalle, which encompasses a full city block in the heart of downtown Chicago’s Financial District, is owned by RCP Office, an entity controlled by Chicago real estate veteran Michael W. Reschke, founder and chairman of The Prime Group, Inc. RCP, which has owned the 22-story office building since 2004, is credited with renovating this historic building and converting the lower 12 floors of office space into a 610-room luxury JW Marriott hotel. The hotel opened in 2010.

The loan is secured by five floors (13-17) of office space totaling 207,953 square feet and 11,379 square feet of street level retail space, which is collectively 94 percent leased. The hotel component, as well as the top four floors, which are being converted into a Canopy by Hilton hotel, were not part of the collateral.

“Our client had the vision of taking a historically designated office building, and converting the lower twelve floors into one of the finest hotels in the city, while simultaneously improving and repositioning the remaining office components of the property,” said David Sonnenblick, a Principal with Sonnenblick-Eichner Company. “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 fixed rate, non-recourse financing was funded by an affiliate of Guggenheim Commercial Real Estate Finance. It features an interest rate below 4% with 30 months of interest-only payments. The remaining term is based on a 30-year amortization schedule.

“There is tremendous capital available today for well-thought out commercial real estate assets with strong sponsorship,” added 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 believed to be one of the largest modern commercial office structures in the world at the time. It was designated as a historic landmark and added to the National Register of Historic Places in 2007.

Source: Sonnenblick-Eichner Company

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