Three years ago, HNA Group paid $359 million for a Loop office tower at 181 West Madison Street, part of the Chinese conglomerate’s buying spree that included other trophy properties across the country.
Less than a year later, with HNA’s finances coming under pressure from new capital controls, the firm briefly put the 50-story property back on the market, but found no takers. Earlier this year, the embattled firm secured a $240 million refinancing for the 930,000-square-foot building from JPMorgan Chase.
The new debt was securitized into several CMBS transactions, including the single-asset deal known as JPMCC 2020-LOOP. Documents associated with the securitization provide an inside look at the property’s rent roll.
As of last November, the tower was 88 percent leased to 29 tenants “across the banking, government, technology, advertising and industrial sectors,” according to the loan prospectus.
The largest tenant at the building, the Northern Trust Company, occupies more than 40 percent of the rentable space and pays $21.31 per square foot in annual base rent, the lowest rate among the building’s major tenants. 181 West Madison is connected by a sky bridge to Northern Trust-owned 50 South LaSalle across the street, and the two buildings jointly serve as the financial services firm’s headquarters.
The tower also serves as the headquarters of its second- and third-largest tenants, consulting firm Quantitative Risk Management and Berkshire Hathaway’s Marmon Group, an industrial holding company.
The fourth-largest tenant is a government agency, U.S. Citizenship and Immigration Services, which pays the priciest base rent among the building’s major tenants at $33.75 per square feet. The Canadian Imperial Bank of Commerce rounds out the top five with 42,000 square feet across the 35th and 36th floors.
Elsewhere in Chicago, Northern Trust recently reconsolidated its office footprint by moving out of two other buildings into the Big Red Building at 333 South Wabash Avenue, which Michael Shvo and Deutsche Finance acquired in August for $376 million.
HNA has had some success in selling off the rest of its U.S. portfolio. The company was able to sell 123 Mission Street in San Francisco and City Center in Minneapolis in 2018, and sold 850 Third Avenue in Manhattan in early 2019 amid pressure from the U.S. government.
Meanwhile, the conglomerate still owns most of its priciest trophy property, the $2.2 billion office tower at 245 Park Avenue in Manhattan, although SL Green acquired a roughly $150 million preferred equity stake in the property in 2018.