Onni lands $220M in loans for Loop office, Goose Island construction

Onni Group overcame a tough lending environment and sour sentiment on Chicago’s office market to pull in $220 million in new loans, including one for a tower on LaSalle Street where other landlords are struggling with low demand for commercial real estate.

The Vancouver, British Columbia-based firm last month landed $170 million from HSBC to refinance a 30-story, 653,000-square-foot office building at 200 North LaSalle, public records show.

It was also issued a $50 million loan from Otera Capital for its massive ongoing project on Goose Island at 1009 North Halsted Street, where it’s preparing to start construction on a five-tower complex with about 2,700 apartments; it will likely require more financing in the future.

Taken together, the debt deals help Onni stand out even further among Chicago’s big real estate players. Few others have taken such a bullish approach on the city, particularly its office market. Onni in 2022 said it was preparing to invest over $1 billion in downtown Chicago.

When it comes to the latest office loan, however, there is a catch: HSBC was Onni’s previous lender for 200 North LaSalle, as it issued $70 million in debt back in 2012 for the landlord to buy the property for a total of $101 million, and then increased that loan up to $128 million as of 2019.

Still, the fact it was able to get a bigger loan than than the building’s last for an office property is rare for the rising interest rate environment that has squeezed many landlords’ equity out of big buildings, forcing them to chip in their own cash in order to refinance loans originated a few years ago, before interest rates rose.

Representatives of Onni and its lenders did not respond to requests for comment.

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After Onni completed a large-scale renovation of 200 North LaSalle, it nailed down 60,000 square feet of leases with the likes of Wasserman, CoxReps, The Planet Group, and Everest Transportation Systems. New amenities include updates to lounge areas, the conference center and the building’s gym as well as the addition of a massage and treatment room and a cafe. 

Onni is also in the process of a $150 million renovation of an office building at 225 West Randolph Street that the company bought in 2022 for $166 million. It recently landed a 90,000-square-foot lease deal at that property from law firm Neal Gerber & Eisenberg.