Sterling Bay Scores $220M Refi
Sterling Bay secured a $220M floating-rate loan to refinance 1K Fulton, its 535k SF Fulton Market king of creative offices, which will soon be Google’s new local HQ.
The lender: LA-based private portfolio lender Mesa West Capital, which was thoroughly wowed by Sterling Bay’s market cache and lease-up success landing biggies like Google. Mesa West principal Ronnie Gul (pictured) tells us the firm had been tracking 1K Fulton and nurturing a relationship with Sterling Bay for a few years. The opportunity didn't make sense for Mesa West pre-construction but the refinance felt like a better fit, he says. Thanks to Google’s 358k SF of pull and amenities like a fitness center, underground parking, the new Morgan & Lake CTA stop nearby and a rooftop deck, the project is already 88% leased (other tenants include SRAM, Sandbox Industries and Boka Restaurant Group).
The financing also included $35M of mezz debt, placed at closing with Morgan Stanley Real Estate Investing. Sterling Bay will use loan proceeds to retire existing debt and finance remaining costs of the former 1923-built Fulton Market Cold Storage facility’s near-complete conversion (pictured) to 10 stories of office. HFF senior managing director Mike Kavanau, managing director Timothy Joyce and real estate analyst Christopher Knight repped Sterling Bay in securing the financing. As for Mesa West, AVP Brandon Bachner says the firm would like to do more business in the Chicago CBD and select suburban pockets, with a focus on office, value-add multifamily and trophy high street retail.