Months after putting a wave-like, 82-story apartment tower in Chicago on the market for sale, the owners have decided to ride the crest of increasing rents instead, taking out a new loan that allows them to remain owners for the long term.
The 474-unit, Jeanne Gang-designed Aqua at Lakeshore East tower has been refinanced for $144 million.
The refinancing deal removes one of the city’s tallest and most distinctive residential towers from the market, after Los Angeles-based Ares Management and Chicago’s Magellan Development Group put it up for sale in October.
Aqua is known for curved white balconies that in sunlight create the appearance of waves on water.
It is one of two skyscrapers designed by Chicago-based architect Gang, who more recently designed the 101-story St. Regis Chicago residential and hotel tower nearby.
JLL, which arranged the debt, announced the refinancing deal Thursday on social media. Magellan Development Group, which completed the tower at 225 N. Columbus Drive in 2008, confirmed the loan to CoStar News.
The new loan was led by an affiliate of Starwood Capital, according to Magellan CEO David Carlins.
“Our partners and we believe in the future of the asset and thought the benefits of refinancing the asset was greater than a sale at this time,” Carlins said in an email to CoStar News.
Ares declined to comment to CoStar News.
Chicago-area rent growth has remained some of the highest among the nation’s largest markets in recent years because of muted construction. Yet sale prices have lagged previous valuations amid higher borrowing costs, worries about Cook County property taxes and other factors.
Some investors have looked to capitalize on the divide between rent growth and sale prices.
Magellan has been a buyer and seller recently in Chicago. The firm earlier this year partnered with Boston-based Intercontinental Real Estate to buy the 332-unit tower at 73 E. Lake St. for $126.1 million.
Last year, Magellan and Sterling Bay sold the multifamily and retail portions of a 47-story tower that they developed at 300 N. Michigan Ave. for $122 million.
Magellan kept an ownership stake in the March 2019 deal in which Ares bought Aqua for $190.5 million. That deal was financed with a nearly $145 million loan from Holliday Fenoglio Fowler, which is now part of JLL. That loan was set to mature this week, according to Cook County property records.
The Gang-designed skyscrapers are part of Magellan’s 28-acre Lakeshore East project, which since 2002 has replaced a former nine-hole golf course with rows of residential and hotel towers along with retail and green space.
In February, Magellan’s development partner on a portion of Lakeshore East, South Korea’s Hanwha Engineering & Construction, put its ownership stake in a development site and retail space anchored by a Mariano’s grocery store on the market for sale.
The Aqua tower also includes a Radisson Blu hotel at the base of the tower as well as condominiums at the top. Those separately owned portions of the property were not part of the refinancing.
For the record
The new loan was arranged by JLL brokers Danny Kaufman, Medina Spiodic, Rebecca Mitchell and Youngsoo Yang.