Bank OZK Courting New Suitors For Former Lincoln Yards Tract
Bank OZK is actively looking for new sponsors for a piece of land it took back from Sterling Bay that had been set to become a part of the developers’ stalled Lincoln Yards megaproject.
Several parties have indicated serious interest in the land, which has gotten “quite a bit of attention” since the bank took it back last month, CEO George Gleason said on the company’s first-quarter earnings call Thursday.
Bank OZK will be as patient as it needs to be to secure a sponsor with the capital and expertise to develop the land to its full potential, he said.
“This is a very valuable piece of land,” Gleason said. “The city of Chicago is very interested in the outcome of this development because it's important to the city.”
Sterling Bay turned over the roughly 28-acre parcel to the bank at the end of March. The land is bound by the Chicago River to the west and south, North Kingsbury Street to the east and West Dickens Avenue to the north, according to Cook County property records.
The developer’s loan was 20 days past due as of the end of 2024, according to management comments at the time. Bank OZK agreed to the loan in December 2019, and it was modified six times thereafter, property records show.
The bank took multiple write-downs on the debt before ultimately taking control of the land.
Gleason said it wouldn’t surprise him if “things moved on this fairly quickly” because of the value and importance of the land. He clarified that doesn’t mean Bank OZK will sell the land within the quarter because of its complicated interactions with the city, tax increment financing districts and city entitlements.
Still, he said the company is optimistic from the initial unsolicited feedback it has gotten from the market.
When asked about its additional exposure to Sterling Bay through other loans, Bank OZK President Brannon Hamblen said each of those projects is unique. There is significant leasing at a number of them and different capital stacks for each project.
“It's not our practice to broad-brush a situation like that in a portfolio that just happens to have the same sponsorship name,” Hamblen said.
A Sterling Bay spokeswoman told Bisnow it had no comment at this time other than “all parties remain committed to the vision of Lincoln Yards.”
Gleason added that Bank OZK has a positive long-term history with Sterling Bay that includes a number of successful executions. Bank OZK views the city’s interest and engagement with the Lincoln Yards megadevelopment as “very positive,” he said.
The developer that gets this project to reach its “ultimate potential” will be one that works closely with the city, Gleason said.
"There's city infrastructure and collaboration that is required on a project of this scale that sits right sort of at the confluence of several significant urban areas in the city,” he said.
UPDATE, APRIL 17, 3:45 P.M. CT: This story has been updated with a statement from Sterling Bay.
