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Chicago’s Salesforce Tower nears $610 million refinancing

CMBS loan will provide long-term debt for 60-story building launched in early weeks of pandemic
Salesforce Tower was completed on the Wolf Point site along the Chicago River in 2023. (Brett Bulthuis/CoStar)
Salesforce Tower was completed on the Wolf Point site along the Chicago River in 2023. (Brett Bulthuis/CoStar)
CoStar News
March 14, 2025 | 6:47 P.M.

Half a decade after breaking ground on a 60-story office tower along the Chicago River in the opening weeks of a global pandemic, the owners of Salesforce Tower are close to finalizing $610 million in long-term debt.

Developers are expected to close March 27 on commercial mortgage-backed securities debt on the trophy tower, a property with a long-term valuation of $888 million, according to a presale report on the debt offering from Moody’s Ratings.

That date is just under five years from the tenuous moment when developers including Hines and the Kennedy family broke ground as the country had moved into isolation in the early weeks of COVID-19.

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The loan from Wells Fargo, JPMorgan Chase and Goldman Sachs then will be packaged and sold to investors in the debt.

Although national office demand remains historically low, top-of-the-market properties such as Salesforce Tower continue to outperform the market.

A December appraisal by Cushman & Wakefield gave Salesforce Tower a current valuation of $745 million, according to the Moody’s report, with the value set to rise to $888 million after costs such as tenant-improvement allowances and free rent are paid off.

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That valuation and the loan amount imply a successful outcome of a project that Chris Kennedy described as “the gutsiest thing I’ve ever heard of business, to commit $750 million to build that building in the middle of a recession caused by the pandemic” in 2022. The comment was made during a topping-out ceremony when construction of the skyscraper reached its full height.

The Hines-led development team declined to comment on the CBMS loan on Friday.

Kennedys’ involvement

Chicago-based Chris Kennedy, the son of former U.S. Attorney General and Sen. Robert F. Kennedy, leads the real estate business of the political dynasty that has owned the Wolf Point site since patriarch Joseph P. Kennedy Sr. bought it in 1945.

The office tower followed the development of two apartment towers on the riverfront site. Along with the Kennedys and Houston-based Hines, investors in the office project included the AFL-CIO Building Investment Trust and local investor Diversified Real Estate.

The approximately 1.2 million-square-foot skyscraper is more than 95% leased to two tenants.

San Francisco-based business software giant Salesforce committed to the project before construction began. Kirkland & Ellis signed its lease in the early stages of construction in summer 2021.

Salesforce Tower opened in May 2023, and later that year the company held an event to celebrate the completion of its space, which includes a coffee bar, residential-style furnishings and large gathering areas on the top floors.

Open space created by the development, which was designed by Pelli Clarke & Partners, includes a 1,000-foot-long extension of the Riverwalk.

Loan details

If the securitized loan is finalized as expected, it will be one of the largest refinancing packages in Chicago in recent years. It would replace about $548.6 million in construction debt taken out in April 2020 from lenders including JPMorgan Chase, according to Cook County property records.

The new interest-only loan is expected to have an interest rate of 6.525% and a maturity in March 2030, according to the presale report.

The loan is backed by a property with an unusually long weighted-average lease term of 17 years, according to Moody’s, although the tenants each have multiple contraction options.

Kirkland & Ellis’ lease for 677,821 square feet expires in 2043, while Salesforce’s lease for 477,100 expires in 2040.

The world’s highest-grossing law firm has invested more than $207 million beyond its tenant-improvement allowance in its space, while Salesforce has plowed in an additional $78 million-plus, according to the Moody’s report.

Salesforce Tower will have a net operating income of about $42.2 million in the first year of the CMBS loan and almost $51.2 million in the second year.

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