Goldman Sachs, Deutsche Bank Lend $305M to Restart Construction on Chicago Skyscraper [Updated]

reprints


A joint venture between Time Equities, JK Equities and Oak Capitals has nabbed $304.5 million in construction debt from Goldman Sachs and Deutsche Bank Wealth Management to finance the completion of a new multifamily rental skyscraper in Chicago’s South Loop area, Commercial Observer has learned.

The debt will restart construction on 1000M, a once-planned residential condominium project at 1000 South Michigan Avenue that will now be built as a rental asset. The development team is kickstarting construction this month, and the work is expected to finish within the next 36 months, according to information from the developers. 

SEE ALSO: Broadway Trade Center Owner Files Chapter 11 Bankruptcy

The trio of borrowers had first started construction on 1000M toward the end of 2019, only for the work to be stopped just several months later after the onset of the pandemic. In the wake of COVID-19 the owners decided to shift their plans away from a condominium, moving instead to build a 73-story, 738-unit luxury rental building. 

In June, the developers got the necessary approvals from the Chicago Plan Commission to pivot away from condo units. The building’s height was reduced by 27 feet — to 805 feet — and the plan for 521 condos was replaced by 738 rental units.

“I’m very proud of the entire 1000M team for reaching this point,” Time Equities Chairman and CEO Francis Greenburger said. “We’re beyond excited to restart construction and thankful to Goldman Sachs and Deutsche Bank for financing this landmark project. 1000M will be a world-class residential tower. We hope to make the city of Chicago proud, and we are grateful to the city for their continued support of this project.”

Greenburger said in the summer that the plan to switch gears to luxury multifamily came after market experts told the developers “that comparable high-amenity luxury buildings are in demand and renting briskly … The pandemic period has been challenging for everyone. We have dealt with these challenges and changes in market conditions by adjusting our development plan in a responsible way so as to have the best final result.”

“We think Francis and Time Equities have a stellar track record and we are excited in DB Wealth Management to be contributing our resources to support this seminal project,” said Anthony Valvo, the market head for New York and the southeast region at Deutsche Bank International Private Bank, Americas.

The project was designed by famous German architect Helmut Jahn’s firm JAHN before he died in May. Even with the new design, it will still be the tallest Jahn-designed building in Chicago. James McHugh Construction is the contractor who’s spearheading the build-out. 

“We remain saddened by the untimely loss of Helmut Jahn — he was a world-renowned architectural genius and lived a remarkable life,” Greenberger said. “Helmut is greatly missed and we will realize 1000M as further testament to his impact on the Chicago skyline.”

The project’s interiors have been reimagined as part of the pivot, with Chicago-based interior designer Kara Mann leading the push. The asset will have 75,000 square feet of indoor and outdoor amenity space for residents, according to the developers.

“While it was disappointing to have to stop construction at 1000M during the pandemic, it gave us the opportunity to completely recalibrate and redesign the project as an ultra-luxury residential rental tower,” Robert Singer, director of development at Time Equities, said. “We think we ended up with the right design, the right product, at the right time. The market in Chicago for ultra-luxury rental apartments is very strong, and we see this segment of the market only strengthening from here. We look forward to delivering best-in-class apartments in late 2024.”

Representatives for Goldman Sachs were not able to respond to inquiries prior to publication. 

Mack Burke can be reached at mburke@commercialobserver.com.

This story was updated after publication to include commentary from a Deutsche Bank official.