$11M Refinance for River North’s Kingsbury Center

In one of the more notable transactions in Chicago’s turbulent office market this year, Next Realty has successfully refinanced the Kingsbury Center, a six-story mixed-use office and retail property at 350 W. Hubbard St. in River North. The Skokie-based firm closed on an $11 million loan with StanCorp Financial Group, a rare 25-year financing arrangement that resets its interest rate every three years.

The deal provides a welcome cushion at a time when many office landlords across Chicago are facing foreclosures, distressed sales, or costly equity injections to satisfy lenders. Unlike other refinancing stories that required massive fresh capital, Next Realty’s deal was effectively a cash-out refinance. Yet instead of pulling money out, the firm is holding reserves to weather potential tenant turnover.

Longtime Ownership, Prime Location

Next Realty has owned and managed the 135,315-square-foot Kingsbury Center since developing it in 1988. The property sits in a highly visible location between the East Bank Club and the Merchandise Mart, with Hubbard and Orleans streets providing prime River North frontage.

The building is 95% leased, with national retailers CVS and Petco anchoring the ground floor. More than half of the office space is occupied by Chicago-based real estate firms including Related Midwest, Habitat Co., Oxford Capital, Bond Cos., and Dayton Street Partners. Habitat also holds an ownership stake and acts as property manager.

That tenant mix has produced stability, with average tenancy exceeding 15 years, a rare figure in today’s volatile office leasing environment. For prospective tenants seeking River North office space, the Kingsbury Center offers a track record of steady occupancy and experienced ownership.

Market Context: A Tough Climate for Office Deals

The refinancing stands out in contrast to other recent office restructurings in Chicago:

• Blackstone was forced to extend the maturity of $1.3 billion in CMBS debt on the Willis Tower.

• Hines refinanced the 60-story Salesforce Tower on Wolf Point for $610 million, replacing its construction loan.

• A partnership led by Shapack Partners and Neil Bluhm’s Walton Street Capital refinanced 167 N. Green St. in Fulton Market for $247 million.

• By comparison, Next Realty’s mid-sized $11 million loan was less complex and benefitted from the Kingsbury Center’s strong occupancy and location.

Just months earlier, Next Realty sold a struggling property at 620 N. LaSalle St. at a steep discount, underscoring how difficult it can be to reposition loft office assets in today’s market.

Looking Ahead: Cash on Hand for Leasing Stability

CEO Andrew Hochberg emphasized the importance of liquidity over profit-taking:

“The focus right now is filling the remaining 5%, but in the office business there’s always turnover that you have to be ready for,” he said.

Rather than pursuing an office conversion, a trend gaining traction in some parts of Chicago, Next Realty is betting on River North’s long-term demand for boutique office space. By maintaining a reserve, the firm aims to stay flexible in tenant negotiations and avoid distressed scenarios.

Broader Investment Strategy

While most of Next Realty’s holdings are concentrated in the Chicago region, its portfolio also spans Milwaukee, Cincinnati, Nashville, St. Paul, Washington, D.C., and Fort Lauderdale. The company has recently raised a new fund targeting retail, residential, and parking investments, a sign it is preparing to be opportunistic in a shifting capital markets environment.

For commercial real estate agents and investors tracking the Chicago office sector, the Kingsbury Center refinance highlights that location, tenant stability, and deal size remain key differentiators in securing financing. In a market where many landlords are surrendering assets, Next Realty’s disciplined approach provides a roadmap for survival and potential growth.