Sterling Bay Secures Financing for New Hotel and Residential Tower on Chicago's Michigan Avenue
CHICAGO: Sterling Bay, one of Chicago's most innovative real estate investment and development firms, today announced the closing of USD 174.5 million in financing for the construction of 300 North Michigan Avenue, a 47-story mixed-use tower to be developed in partnership with Magellan Development Group.
This development will serve as a striking new addition to Chicago's Michigan Avenue. We are extremely proud that financing has successfully crossed the finish line despite the pandemic, said Andy Gloor, CEO of Sterling Bay. Our ability to originate multiple loans from industry-leading lenders - as well as from a diverse group of individual investors - at a time when capital is at a premium is a testament to our team's excellent track record for success in commercial property development.
As an award-winning, well-capitalized company with a growing portfolio of commercial real estate projects in Chicago and various emerging markets across the country, Sterling Bay has assembled a best-in-class team to lead development at 300 North Michigan Avenue. Alongside Sterling Bay's development partner Magellan, Chicago-based general contractor Linn-Mathes will oversee the construction process slated to begin in August, ensuring compliance with the City of Chicago's mandates for equitable contractor engagement, and local design firm bKL Architecture will serve as lead architect.
Magellan has a commitment not only to high-quality construction and innovative design, but also to enriching the communities in which we build. We are excited about this project and to be partnering with Sterling Bay; it will be a great fit for the Chicago market, said Brian Gordon, Executive Vice President of Magellan Development Group.
Sterling Bay's capital structure includes senior-secured financing from Bank OZK, a bold regional bank that valued the project's long-term potential from its onset, as well as mezzanine financing from Pearlmark Real Estate and Monroe Capital, and a crowd-sourced equity component fundraised through CrowdStreet.
Bank OZK is delighted to provide financing for 300 North Michigan Avenue, a state-of-the-art mixed-use development in downtown Chicago. Sterling Bay's development embodies the high standards Bank OZK consistently seeks in its project financings - marquee real estate, strong market fundamentals, and top-tier sponsorship, stated Ako Dickson, Executive Vice President of Originations at Bank OZK's Real Estate Specialties Group. Andy Gloor, David Carlins and their respective teams at Sterling Bay and Magellan are creating a better place to live, work and play in their hometown. We appreciate the opportunity to participate in this project and look forward to a very successful execution.
Securing a construction loan of any dollar amount in today's business climate is a feat, but to secure financing of this magnitude - especially for a property that includes significant involvement of a hotel operator - is almost unheard of, said Stephen Quazzo, CEO of Pearlmark. We are confident in Sterling Bay and Magellan's reputations as industry innovators and Pearlmark, along with Monroe, look forward to partnering with their team and Bank OZK to bring this exciting project to life.
Sterling Bay is one of the more innovative and inspiring developers on the scene today, not just in Chicago but across the country. 300 North Michigan Avenue was an exciting offering for the CrowdStreet Marketplace as our investors are responding well to national sponsors like Sterling Bay, and we certainly look forward to bringing more of their offerings to our fast-growing investor base, said Tore Steen, CEO of Crowdstreet.
Sterling Bay's 300 North Michigan Avenue presents an opportunity for the City of Chicago to continue developing world-class properties that deliver important economic opportunities to the community. The development of 300
North Michigan Avenue will create over 500 on-site construction jobs over the course of development, approximately 70+ permanent on-site jobs in residential and hotel operations once complete, and include a $3.9M payment by Sterling Bay into Chicago's Neighborhood Opportunity Fund - a fund used by the City to support small businesses in underserved neighborhoods on the South and West sides.
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