Citizens Financial Leads $296M Financing for 1.2 MSF Chicago Office Project

By Barbra Murray, Contributing Editor

Citizens Financial Group has paved the way for the O’Donnell Investment Co.’s $500 million development of 150 N. Riverside, a nearly 1.4 million-square-foot office high-rise in Chicago’s coveted West Loop submarket. Citizens Financial, Bank of America and Helaba—co-lead arrangers and joint bookrunners—provided the developer with a $296 million construction loan.

The project was a magnet for investors, but there were a few reasons why the Citizens Financial-led consortium emerged victorious in the competition, one of which was reliability. “I think what our clients look for is certainty of execution, so when we say we’re going to do something, we do it,” Gary Magnuson, head of commercial real estate finance at RBS Citizens, the commercial banking arm of Citizens Financial, told Commercial Property Executive. “There’s a high level of confidence in our ability to deliver on time with reasonable terms.”

There’s a reason for the half-billion-dollar development price tag and big-ticket financing for 150 N. Riverside. Towering 53 stories above the Chicago River on a parcel that had sat vacant for quite some time, the Goettsch Partners-designed skyscraper will be a premier office destination, providing 1.2 million square feet of leasable state-of-the-art office space, as well as 12,000 square feet of on-site food service, a 7,000-square-foot fitness center, all surrounded by a 1.5-acre park. The property boasts LEED-CS Gold pre-certification, obtained through the incorporation of a host of features, including a 100 percent green roof. Further adding to its sustainability, the building will feature a bike room accommodating more than 100 bikes and serve as a model of transit-oriented development with a location within immediate proximity to Union Station, Ogilvie Transportation Center and a host of “L” stops.

But perhaps the most talked-about feature of 150 N. Riverside is its future as the new corporate headquarters of William Blair & Co. The asset investment banking and asset management firm signed a lease for 318,000 square feet in the building early this year, becoming the property’s anchor tenant.

“Obviously, we think it’s a good sponsor, a great location and nice pre-leasing,” Patrick Burns, executive vice president & managing director for institutional real estate with RBS Citizens (soon to be renamed Citizens Commercial Banking), told CPE.  “And the partnership that we have with Helaba and Bank of America is a partnership we’ve had on other deals. We are comfortable with all aspects.”

Additionally, both Citizens Financial and O’Donnell Investment were reassured by a personal history. “John O’Donnell had a level of comfort with the people he was working with because of his experiences with them,” Magnuson noted.

Burns has known John O’Donnell for approximately two decades, having worked with him when he served in the roles of president, COO and CFO with real estate concern The John Buck Co. in Chicago. “He did a number of large office towers within his capacity there and then went on to start his own company (in 2010), so we felt he had the experience and expertise to get something like this done,” Burns added.

Clark Construction is on board as general contractor for 150 North Riverside and expects to complete the tower in 2016.