JMB Realty lands $180M refi for vintage skyscraper that’s 89% leased

JMB Realty landed $180 million in refinancing from Goldman Sachs for the office and retail portions of its landmark skyscraper on Chicago’s Magnificent Mile. 

The Chicago-based firm, founded by Robert Judelson, Judd Malkin and Neil Bluhm, has infused $56.4 million in new equity to refinance the 66-story building at 900 North Michigan Avenue, marking the first significant restructuring since the tower was built in 1988, Costar reported, citing a KBRA presale report. 

JMB’s equity investment replaces the previous loan’s $206.8 million remaining balance and will fund future leasing. Of the new debt, $80 million will be included in a commercial mortgage-backed securities offering. The debt is being financed at an interest rate of 6.85 percent.

The refinancing will focus on the 831,000 square feet of commercial space, excluding luxury condominiums and the Four Seasons hotel within the tower.

The office portion of the building is 89 percent leased. Its largest tenant, publicly traded alternative investment manager GCM Grosvenor, recently signed an 11-year lease extension for 72,700 square feet, in a downsizing move, shedding 40,500 square feet. Other tenants include JMB itself and Walton Street Capital, another firm associated with JMB co-founder Bluhm.

JMB has invested $57 million in upgrades to the property, including adding the Aster Hall food hall, a library, a speakeasy and a digital art display canopy, according to the presale report. These upgrades are crucial for retaining existing tenants and attracting new ones in a competitive office leasing environment.

Leases that account for almost 73 percent of the building’s total base rent, are set to expire between 2026 and 2029. That prompted JMB to set aside $5 million for re-leasing vacant spaces.

The retail portion of the building includes Bloomingdale’s, Gucci, Aritzia, Tesla, Equinox and J.Crew.

The North Michigan Avenue office market has faced historically high vacancy rates, and several large stores have closed and some luxury retailers have relocated to nearby Oak Street. The market has also struggled with low demand, which has led at least one developer to consider office-to-resi conversion. Commonwealth Development Partners reportedly is in talks to buy the 24-story building at 500 Michigan Avenue with residential conversion plans.

— Andrew Terrell

Editor’s note: This story has been updated to correct Michael Sacks’ title and insert the founders of JMB.

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