$115M Loan Closes on Block 37 Office Building

A Golub/BlackRock joint venture plans to build a 17-story office building, which is already 80% preleased to CBS 2 for a broadcast center, and the offices of Morningstar Inc. The company also plans to build a 416-unit apartment building and a 381-unit condominium tower atop a retail building. Joseph Freed & Associates is considering the purchase of the retail portion of the site from the Mills Corp.

Attorney Michael Kurtzon with Schwartz Cooper tells GlobeSt.com that the LaSalle loan should guarantee that the project will be completed. Developers have tried and failed numerous times to build on the block bounded by State, Randolph, Dearborn and Washington, the vacant site of a former mixed-use development torn down decades ago.

"This is the key piece of redevelopment on the block," Kurtzon says. "This is the first piece of it, and should really get things going. The office building is definitely going up." Joseph McCoy and Julie Heller assisted Kurtzon in the deal. The office complex is scheduled to open in the first half of 2008.

The Mills Corp. sold the land and air rights at the property for office and residential last week to a joint venture between Chicago-based Golub & Co. and the New York-based BlackRock investment firm. If the Freed deal goes through, Mills, which started the multi-use project on the property known as Block 37 two years ago, will be completely removed from the development plan.

The venture is completing its due diligence and hopes to close by the end of the year. Golub officials have not said if plans have changed for the 265,000 sf of planned retail space, but have confirmed the underground CTA station is a part of the plan.Michael Newman, Golub's president and chief executive officer, would not divulge the purchase price, but said the complex the company plans to build will cost more than $450 million.