Wanxiang extends huge office loan, plans $50M overhaul of Prudential Plaza
Scored two-year extension of $389M loan from CW Capital
Wanxiang America Real Estate Group is ready to spend gobs of cash to renovate a downtown Chicago property and compete for tenants amid a tough office market.
The Chicago-based firm, which is the investment arm of Chinese auto parts manufacturer Wanxiang Group, plans to invest over $50 million to upgrade the 2.3 million-square-foot Prudential Plaza office complex at 130 East Randolph Street, Crain’s reported.
Wanxiang’s two-year extension of its $389 million mortgage on the property prolongs the maturity date until 2027, with the option to extend it through 2029. Wanxiang, which bought Pru Plaza for $680 million in 2018, had been in talks with its lender, CW Capital, to modify the loan terms in response to rising interest rates and pandemic-fueled office vacancies.
Wanxiang plans to overhaul the site, managing director Larry Krueger said.
“Our significant infusion of capital into the property will not only allow us to continue to fully fund new and renewed leases but will also allow us to elevate the tenant and visitor experience throughout the buildings,” Krueger told the outlet.
The planned renovation calls for a rooftop deck on the 11th floor of One Prudential Plaza, connecting it by an enclosed glass walkway to Two Prudential Plaza tower. The vacant 11th floor of Two Prudential Plaza will feature a 20,000-square-foot conference center and entertainment area with a bar, lounge and co-working space.
The revamped property will also include a pickleball court, two golf simulators in the tenant lounge, an improved fitness center and more landscaping.
Moreover, Wanxiang’s recent settlement with Prudential over naming and signage rights adds another layer to its strategic vision for the property. With Prudential relocating its Chicago office, Wanxiang faces leasing challenges but remains optimistic about attracting anchor tenants interested in naming rights.
The loan extension places Prudential Plaza among a select group of downtown Chicago office properties that have renegotiated loan terms amid financial uncertainties. The Aon Center and 1 South Wacker Drive have also secured loan extensions.