Sterling Bay Refinances Fulton Market Tower for $79M

A venture tied to Sterling Bay has taken out a $79 million loan against its 11-story office building at 345 N. Morgan St. in Chicago’s Fulton Market, paying off a maturing $70 million Bank OZK construction loan, according to The Real Deal, which cited CoStar for the loan amount and Crain’s Chicago Business, citing Cook County records, for the OZK payoff. Cook County Assessor records confirm the ownership link: the mailing name on the building’s PIN is “345 N Morgan LLC,” registered at 333 N. Green St., Suite 1100, Sterling Bay’s own Chicago headquarters.

The new loan came from an entity tied to German lender DekaBank. The Real Deal reported the building, completed by Sterling Bay in 2022, was noted at 94% leased earlier this year, with supply-chain firm Havi Group holding nearly half the space through a lease running to March 2039 and roughly $178 million in future contractual rent lined up. Sterling Bay had put the 197,000-square-foot building on the market with no asking price in January; the outlet, citing sources familiar with the listing, reported bids crept close to $100 million before the firm instead refinanced. The DekaBank loan implies a building valuation of around $120 million, according to the outlet. It is unclear what the refinancing means for Sterling Bay’s equity in the property.

Why it matters

The deal is a data point on a split Chicago office market: lenders are still willing to fund trophy, occupied Fulton Market space even as the broader downtown office stock struggles, a dynamic reinforced by Sterling Bay’s own $340 million refinancing of its Franklin Street tower earlier this fall, led by a different ownership group but in the same submarket logic: leased buildings keep attracting debt, vacant ones don’t.

The numbers

The $79 million loan replaces a $70 million construction loan from Bank OZK that had matured. The building is 94% leased, anchored by Havi Group’s lease through March 2039. The Real Deal put the DekaBank loan’s implied valuation at roughly $120 million, above the bids that reportedly came in near $100 million during Sterling Bay’s January marketing attempt.

What’s next

Sterling Bay already closed a separate $213 million, three-year refinancing from Barings on its 360 N. Green St. tower in late July, so 345 N. Morgan is the firm’s second Fulton Market refinancing of the year. Whether the firm revisits a sale of 345 N. Morgan once the new loan is in place, and what the refinancing means for its remaining equity in the building, are both open questions the outlet flagged as unresolved.