With $500 million-plus in construction financing in the bag, real estate developer Hines has begun work on its 60-story Salesforce Tower on the banks of the Chicago River.
JPMorgan Chase, Wells Fargo, and U.S. Bank are among the lenders who contributed to the syndicated construction loan, which is among the largest in the city’s history, according to the Chicago Tribune.
Houston-based Hines broke ground on the 820-foot-tall tower — one of the tallest in development in the city — shortly after finalizing the loan on April 2.
Hines senior managing director Greg Van Schaack said that the coronavirus pandemic didn’t derail the funding because the players involved are large entities.
“It’s a tough time for any project that has smaller investors distracted by other issues,” he told the Tribune. “With the lenders and investors that we have, we were able to stay on course. We’re very lucky for that.”
Construction could wrap by the fall of 2022, according to Van Shaack.
San Francisco-based Salesforce secured naming rights for the tower in 2018 when it inked a lease for 500,000 square feet of office space.
Van Schaack said there’s around 700,000 square feet of vacant office space left to lease in the tower. He said he expects prospective tenants to pump the brakes and reassess their needs, but thinks the economy will recover by the time the tower opens.
Hines is developing the tower, along with the wider Wolf Point site, with the Kennedy family, Larry Levy; and the AFL-CIO Building Investment Trust. Salesforce Tower is the third and final tower to go up on Wolf Point. The other two are luxury apartment buildings. Hines bought two of the parcels needed for the Salesforce Tower from the Kennedy family last month.
The $500 million-plus in financing is the largest construction deal since 2017, when Magellan Development Group and Dalian Wanda Group scooped up a $700 million loan from Ping An Bank. [Chicago Tribune] – Dennis Lynch