Real estate developer the Onni Group is expected to borrow $1 billion to refinance an eight-tower apartment portfolio in Chicago and Los Angeles as the Canadian firm plans several big projects in both markets.
The developer is set to take out a five-year, fixed-rate mortgage for $875 million, plus another $125 million in mezzanine debt, according to a presale report from Fitch Ratings on the commercial mortgage-backed securities offering.
Vancouver-based Onni Group’s refinancing deal for the 2,791-unit portfolio comes during a challenging period in the lending market and as the firm has several ambitious projects underway or in the planning stages in the nation’s second- and third-largest cities.
The company plans to develop more than 5,000 apartments at riverfront sites on and near Chicago’s Goose Island in the coming years as well as more than 1,100 units on the Times Mirror Square site that includes the former Los Angeles Times building.
New CMBS debt will replace $930.5 million in existing debt while paying other costs and allowing Onni to pocket $38.6 million of equity, according to the Fitch Ratings report.
Originated by Wells Fargo Bank, Citi Real Estate Funding and Goldman Sachs Bank, the loan will be packaged and sold to investors in the debt. The deal is expected to close on July 18, according to the report. Onni Group did not respond to a request for comment about the new debt from CoStar News.
The buildings Onni Group is refinancing include 2,226 apartments, 565 short-term rental units and 174,963 square feet of commercial space, built between 2015 and 2023.
Towers Included
Chicago properties in the financing deal include 32- and 41-story towers within the Old Town Park project at 1140 N. Wells St. and 228 W. Hill St., the 38-story 369 Grand in River North, a 25-story tower at 750 N. Hudson Ave. and the 30-story Onni Fulton Market at 354 N. Union Ave.
The largest property in the Los Angeles area being refinanced is Onni East Village, a 23-story tower connected to an eight-story structure at 330 E. Third St. in Long Beach, California. That property has 432 units. Within Los Angeles, the 34-story Level Los Angeles at 888 S. Olive St. and the seven-story SMB Hollywood at 6933 Santa Monica Blvd. are among the properties in the deal.
Other real estate projects in Chicago include an ongoing redevelopment of a vacant, 33-story office building in the Loop business district and construction plans for 2,650 apartments on the southern tip of Goose Island, a man-made, traditionally industrial island north of the Loop that hasn’t had a resident in decades. Just across the Chicago River, Onni Group seeks to build another 2,451 units on the site of a former Chicago Tribune warehouse at 700 W. Chicago Ave.
Onni Group’s Los Angeles-area plans include redeveloping a former shopping center in Long Beach with about 600 residential units and building two towers with a combined 858 units in Glendale.
That ambitious development pipeline and the pending $1 billion refinancing are examples of how far the firm has come since its founder, Innocenzo “Inno” De Cotiis, is said to have arrived in Canada penniless from his native Italy in 1959. The company’s name is an anagram of the name of the founder who died of cancer in 2020.
Onni Group is known for having never sold a U.S. property that it has developed. Instead, projects are decadeslong investments for the firm’s owners, members of the De Cotiis family.
One of the late founder's sons, Rossano, now runs the company.
Overall, Onni Group has developed more than 15,000 homes and 18.4 million square feet of office, retail and industrial space, with another 28 million square feet in various stages of development, according to Fitch.
Onni Group also owns properties in markets including Vancouver, Toronto, Seattle and Phoenix.