Aries Capital has secured a $26.5 million 10-year nonrecourse commercial mortgage-backed security first-mortgage loan to finance a former lamp factory turned green property.
The property had been a shuttered landmark, the Cooper Lamp Factory, which closed in 2005. David and Douglas Baum purchased the property with the goal of making it a sustainable, environmentally friendly Class A office and retail building, which has been renamed the Green Exchange.
But the brothers ran into the credit crisis, as midstream during the renovation their construction lender said it could not continue to provide the financing needed to do the work.
They were able to find a substitute construction lender but also were able to get a $15 million HUD 108 loan for redevelopment because the property at 2545 W. Diversey was located in a blighted area. The property is also eligible for historic tax credits which allow for up to 20% of the renovation expenses to be monetized.
Aries senior vice president Jeff Bucaro said, “The Baums did an amazing job of developing, leasing and stabilizing the asset during one of most challenging times in commercial real estate ownership. They were also very creative in their utilization of a multitude of subsidies to capitalize and complete the development, however, this created some major obstacles and complications when it came to securing permanent debt.”
Aries was able to secure the CMBS financing to supplement the HUD 108, tax credit financing and other benefits the Baums received to redevelop the property.
Aries chairman and CEO Neil Freeman added, “Combining their leasing expertise with government financing incentives, the Baums have created a national model for a successful green development that few developers could have accomplished.”
