Manulife Investment Management provided a $120.1 million mezzanine loan to Chicago developers Fulton Street Companies and JDL Development for a construction financing package to develop 919 on Fulton, an office and retail project in the city’s Fulton Market district.
The loan was part of a $233 million financing package arranged by JLL Capital Markets. Little Rock, Ark.-based Bank OZK provided the remainder of the financing.
Manulife’s involvement in the deal shows the Canada-based firm remains focused on the Chicago market even though a major project it is developing in partnership with Sterling Bay even though was recently turned down by the $11.5 billion Chicago Teachers’ Pension Fund.
The 919 on Fulton project, due for completion in 2025, will feature 350,000 square feet of premium office space and 23,000 square feet of upscale retail in the heart of the Fulton Market district. Located just northwest of downtown Chicago, the historic district was once chockfull of industrial and meat-packing plants but is now a thriving business and entertainment destination served by numerous hotels, bars, restaurants, retail stores.
The Fulton Market district is home to the global and regional headquarters for major corporations including McDonald’s, Google, Kimberly Clark and Mondelez. Commercial real estate data provider CoStar classifies it as one of the top office submarkets in the U.S., with positive net absorption in all but one the past 11 years.
“The next few years should offer an attractive environment for private real estate credit. Investors will potentially benefit from opportunities where traditional financing supply is not meeting market demand,” said Marc Feliciano, global head of real estate for the Manulife real estate investment team, which leverages proprietary data and research and its regional market knowledge to make opportunistic moves in attractive markets.
“The Fulton Street transaction is an example where we swiftly developed a creative financing solution to capitalize the opportunity and facilitate construction of a high-quality asset in an irreplaceable location,” Feliciano added.
