Background:

The 30-story high rise on Michigan Avenue in Chicago was developed in 1981 using HUD financing.  SP approached the existing Ownership (a limited partnership whose general partner was affiliated with SP) with a plan to re-capitalize the Ownership to both refinance the HUD mortgage and renovate the asset.

SP provided participating debt capital to the ownership.  SP was then able to obtain a new loan from LaSalle Bank allowing it to both negotiate a discounted payoff of the existing mortgage and infuse an additional $10 million into repositioning the asset.

Highlights:

• The interiors were rehabbed to condo grade specs with new cabinetry, upgraded lighting, tile bathrooms, and all new appliances.
• All units featured unblocked panoramic views of the city and the lake and the firm was able to capitalize on this unique site feature to drive the sales price up.
• In addition to repositioning efforts and credit enhancement, SP contributed just $4 million of capital to 1212 South Michigan and received $25 million in return over a five-year period.