New Chicago Tower Scores $559M Loan From Namesake Tenant

One of Chicago’s newest skyscrapers just got a loan for $559 million from its anchor tenant after a joint venture agreed to buy a stake in the building at a huge valuation.

The Bank of America Tower, at 110 North Wacker Drive, had the new mortgage recorded on it April 1, Cook County records show. The debtor is Chicago-based Callahan Capital Partners, which is led by a veteran of the city’s real estate market, Tim Callahan, and the lender is Bank of America, which is leasing more than 500,000 square feet in the building.

The 55-story, 1.3 million-square-foot tower opened in October 2020, and when a partnership between Callahan and Oak Hill Advisors bought a controlling stake in the building from Houston-based Howard Hughes, it implied a total property value of more than $1 billion. The valuation demonstrated the remaining appetite for office properties is for new development offering upscale amenities in markets with lots of commercial real estate like Chicago, New York and San Francisco.

The joint venture between Oak Hill and Callahan paid Howard Hughes $210 million for the controlling equity stake in the property, Crain’s reported last month, citing the seller. The tower is 82 percent leased and its other tenants include law firms Jones Day, Morgan Lewis & Bockius, Perkins Coie, King & Spaulding and Cooley, the outlet reported.

Oak Hill declined to comment on the mortgage, and attempts to reach Callahan and Bank of America were unsuccessful.

It’s unclear whether provisions in the loan terms prevent Bank of America from foreclosing on the property if it were to stop paying rent or make an early exit from its lease. Although this is not the first time Bank of America made a big loan on a property named after the financial institution. In 2019 it led a $1.6 billion refinancing of One Bryant Park in Manhattan, also called Bank of America Tower and where it is a tenant.

Since Bank of America left Chicago’s 135 South LaSalle for its new namesake Loop tower, the older building’s value has plummeted by $200 million since 2015, according to a recent valuation reported earlier this year. AmTrust, that building’s owner, left it out of its $100 million renovation plans for five other office buildings it owns in the Loop.

Back on Wacker, however, the new Bank of America building’s valuation by the joint venture puts the tower behind only the city’s tallest building, Willis Tower, which was bought for $1.3 billion by Blackstone in 2015.