In the ever-shifting landscape of commercial real estate, success often hinges on timing, strategic foresight, and the ability to adapt to market turbulence. Recently, a Shapack Partners-led venture secured a significant $247 million refinancing for 167 North Green Street, the largest office building in Chicago’s Fulton Market district. This transaction stands out as a rare and noteworthy win for downtown office owners, a sector grappling with the twin challenges of remote work trends and a surge in distressed commercial debt.
The joint venture, involving Shapack Partners along with Focus Development and Walton Street Capital, is set to close a five-year, interest-only loan this month. This new financing will retire a $232 million loan originated from Deutsche Bank in 2021, providing the owners with vital breathing room amid an uncertain interest rate environment and ongoing fluctuations in office space demand. At $387 per square foot, the refinancing reflects a careful balance between securing necessary capital and navigating the complex dynamics of today’s office market.
167 North Green Street is an imposing 17-story tower encompassing approximately 638,800 square feet of office space. In an office market that has been substantially disrupted by the rise of remote and hybrid work models, this building’s nearly 92 percent occupancy rate is particularly impressive, especially when compared to the downtown Chicago average hovering around 73 percent. This strong leasing performance underpins the building’s recent appraisal at $370 million, or $570 per square foot, figures that highlight both its prime location and high demand among tenants.
The loan will be securitized through a Commercial Mortgage-Backed Securities (CMBS) offering, making detailed performance data publicly accessible and increasing transparency in an otherwise opaque sector. Interestingly, although the previous loan had maturity scheduled for next year, the owners opted for an early refinancing. This decision was driven by a desire to lock in financing terms despite the relatively high interest rate of approximately 6.7 percent, a reflection of the current tightening monetary environment and increased risk premiums in commercial lending.
The tenant mix at 167 North Green Street exemplifies the building’s attractiveness to a diverse range of companies. One of the largest tenants, CCC Intelligent Solutions, occupies more than 140,000 square feet with a lease running through 2037, underscoring their long-term commitment to the location. MoLo Solutions also secured a sizeable footprint of roughly 94,000 square feet with a lease extending through 2034; however, this space is currently being marketed for sublease, hinting at shifting space needs or strategic adjustments by the company. WeWork, despite filing for bankruptcy in 2023, continues to occupy over 93,000 square feet, maintaining its lease obligations. Additionally, Guidehouse, a Virginia-based consulting firm, subleased nearly 47,000 square feet from Kroll earlier this year, reflecting ongoing activity and turnover in the office tenant landscape.
These leasing developments paint a complex picture of resilience mixed with adaptation. The ongoing subleasing and lease adjustments reflect broader trends in the office sector, where tenants are increasingly seeking flexible arrangements to match evolving workforce models. Buildings like 167 North Green that maintain high occupancy through stable, creditworthy tenants are better positioned to weather the storm of uncertainty than many others in the market.
The refinancing deal also sheds light on the strategic financial management necessary for owners in today’s environment. Interest rates have risen sharply from the ultra-low levels seen in the years following the global financial crisis and the pandemic-related stimulus. For office property owners, this means higher borrowing costs and increased scrutiny from lenders. Refinancing before rates climb further or before loan maturities coincide with potential market downturns is a tactic employed by savvy owners to safeguard their assets and maintain operational stability.
Local brokers and industry experts have noted that deals like the $247 million refinancing for 167 North Green Street are becoming more selective and challenging to secure. Many lenders have tightened underwriting standards and increased reserve requirements due to perceived risks in office real estate, especially in urban cores where remote work has led to softening demand. Thus, the ability of Shapack Partners and its partners to negotiate favorable terms signals confidence in the asset and belief in the eventual stabilization of the office market.
Behind these financial maneuvers lies the human dimension—the companies and individuals who work in these spaces and the broader community impacted by the health of the downtown office market. Fulton Market itself has undergone a remarkable transformation over the past decade, evolving from an industrial district into one of Chicago’s most vibrant commercial neighborhoods. This shift has brought new energy, jobs, and amenities to the area, changing how workers and residents interact with the urban environment.
I recently spoke with a regional office manager for a tech company leasing space in Fulton Market, who emphasized the importance of location and building quality for attracting talent. “We want our employees to have access to great dining, transit, and modern workspace,” she said. “167 North Green delivers on all those fronts, which is why it’s remained attractive even as some companies rethink office use.”
Still, the broader picture is not without challenges. Many office buildings nationwide are grappling with vacancies, rising operating expenses, and the need to retrofit spaces for health and technological upgrades. The ability of buildings like 167 North Green to maintain high occupancy and secure refinancing at competitive rates offers a glimpse of optimism but also highlights the need for continuous adaptation.
Sustainability is another factor increasingly influencing office building valuations and financing. Investors and tenants alike prioritize energy efficiency, wellness features, and certifications such as LEED. While specific sustainability details for 167 North Green Street were not highlighted in recent reports, market observers note that buildings that integrate such features tend to perform better financially and attract longer-term tenants.
The CMBS securitization planned for this loan will allow investors to access detailed performance metrics and risk assessments, contributing to greater transparency in an asset class often criticized for opacity. This transparency can benefit all stakeholders, from lenders and investors to tenants and community members, by fostering accountability and informed decision-making.
As Fulton Market and downtown Chicago continue to navigate the post-pandemic era, transactions like this refinancing act as markers of both resilience and caution. The ability to secure substantial capital at manageable terms provides building owners with the flexibility to manage operational challenges, invest in property improvements, and respond to tenant needs.
From the perspective of city planners and economic developers, maintaining a healthy office market is critical to sustaining the vibrancy of Chicago’s urban core. Offices support ancillary businesses such as restaurants, retail shops, and cultural venues, all integral to the city’s economic ecosystem and quality of life. Thus, financing deals that ensure stability in key buildings like 167 North Green indirectly support broader community well-being.
In reflecting on this refinancing milestone, it becomes clear that the commercial real estate sector, while facing significant headwinds, continues to attract sophisticated capital willing to place bets on recovery and long-term growth. The interplay of tenant demand, investor confidence, and financial strategy will shape the future of downtown office markets—not only in Chicago but across many American cities wrestling with the new realities of work and urban living. 🌆🏢💼