Bank OZK, Square Mile Back $735M Financing Package on $850M Chicago Project
Bank OZK has provided $475 million in construction financing and Square Mile Capital Management a $260 million structured investment—which includes preferred equity and mezzanine debt—for One Chicago Square, JDL Development and Wanxiang America Real Estate Group’s planned $850 million mixed-use project in Chi-Town, Commercial Observer has learned.
Construction on the planned 76-story, 1.5-million-square-foot tower, which will be Chicago’s sixth-tallest tower, is expected to wrap in the second half of 2022.
“This represents a major step forward for our firm’s goal of becoming a capital provider of choice for best-in-class owners and developers of transactions of scale in urban markets with the requisite attributes for sustainable growth in a rapidly evolving technology-driven environment,” Square Mile managing director Matt Drummond said in a prepared statement.
JDL closed on the project’s construction financing package on March 12. There was also an equity investment from Wanxiang in the deal, JDL President Jim Letchinger told Crain’s Chicago Business last week. Letchinger did not immediately respond to a request for comment.
The development—at 740 North State Street—will feature 735 rentals, 77 residential condominium units and 193,000 square feet of retail space that’s mostly pre-leased to Whole Foods and fitness club Life Time Athletic. Office and event space will be included as part of the project, which will have over 1,000 parking spaces.
“A large part of what is fueling our growth is our ability to take on attractive situations that call for complex ownership and debt structures,” Drummond said in prepared remarks. “The One Chicago Square development is a perfect example. We saw this as a great opportunity to provide a structured investment in a development project that is extremely promising, given the ongoing local demand for high-quality residential and retail product.”
JDL received approval for the project from Chicago’s city council last year and then again from the city’s planning commission on Jan. 18. After a two-year-long process, the firm can now break ground on the planned property, which will occupy a full city block on the site of a former parking lot in the city’s River North neighborhood. JDL purchased the site from the Archdiocese of Chicago in April 2017.
“The best submarkets in Chicago are experiencing significant demand as a new generation of young professionals seeks to enjoy the rich, multi-faceted 24/7 urban lifestyle that the area offers,” Drummond said. “We anticipate that this part of Chicago will continue to exhibit strong fundamentals and we are pleased to invest accordingly.”
With additional reporting from Cathy Cunningham.