(Bloomberg) – After years of delays and challenges of obtaining long-term financing, Sterling Bay was forced to hand over a portion of its $6 billion Lincoln Code development to its lender.
Sterling Bay wrote in a letter to investors that the developer will convert the north of the 53-acre project into Ozk Bank. Sterling Bay CEO Andy Gloor told investors in the project the move was an “unfortunate pause in development” but said all parties remain committed to the project.
“Like cities across the country, the Chicago commercial real estate market faces unprecedented pressures that prevent financing of projects of every size and curb economic opportunities that these projects bring,” he wrote in the letter.
An OZK spokesman said the initial $126 million mortgage had been written twice by lenders and was considered a high risk of default.
“We will begin our efforts to market the property patiently to new sponsors with sufficient capital and development expertise to realize its tremendous potential,” the bank said.
Lincoln Courtyard is located in an industrial area on the north bank of the Chicago River, between the city’s two wealthiest neighborhoods: Lincoln Park and Wicker Park. The project initially broke ground in 2021 and the building will last for a decade. Instead, it faces parking, starting with Glore, said former Chicago Mayor Lori Lightfoot delayed the project by three years in 2023.
The development will include 14 million square feet of development, including office, life sciences and laboratory space, as well as 6,000 residential units.
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