ARIES GUTS IT OUT
After two years of searching through CMBS lenders, bridge rates, and floating-rate loans, Aries Capital finally closed on the $45.3M refi of the Clark Adams building at 105 W Adams for client Crown Commercial Real Estate. What's so hard about refinancing a building that's 95% leased and in a great location?
|Crown's Musa Tadros (third from right, with son Nick Tadros, Aries Capital's Jeff Bucaro and Neil Freeman, and Crown's Eva Rios, Adam Gilgis, and Courtney Pogue) bought the 460k SF building in 2006 when it was just 65% leased. Musa, a contractor, improved the building and filled it with tenants like the University of Chicago, Northwestern (any inter-office rivalry?), and soon-to-be retail tenants Jersey Mike's and Native Foods Cafe. But the building's main tenant, the 500-room Club Quarters Hotel has an option to buy its space in the building, which meant potential lenders had to take into consideration possible defeasance fees if the hotel exercised its option. Lenders also had to underwrite the hotel and office in the same loan—not an easy task as the hotel was unwilling to share its financials.|
|Eventually, Jeff and Neil found Wells Fargo, which offered Crown two separate loans: a $27M fixed-rate loan for the office and retail, and a floating-rate loan for the remainder of the balance on the hotel (avoiding potential fees if it buys the space) at a blended rate of 4.19%. Musa can now get back to signing a lease with one more retail tenant as well as creating food-desert shopping centers on the South Side, his specialty since the '90s.|