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Murphy Development JV lands $135M for Chicago hospital redevelopment

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Murphy Development JV lands $135M for Chicago hospital redevelopment

A Murphy Development Group-led team obtained roughly $135 million in financing to redevelop the Cook County Hospital building at 1835 W. Harrison St. in Chicago, the Chicago Tribune reported.

Civic Health Development Group is set to break ground on the project within two weeks, Chairman and CEO John Murphy told the publication.

The redevelopment will involve the conversion of two-thirds of the roughly 345,000-square-foot hospital building into an integrated Hyatt House and Hyatt Place hotels with a total of 210 rooms, roughly 75,000 square feet of medical offices and 25,000 square feet of retail. The executive added, according to the report, that the renovation will mark the first phase of at least five phases of development project, which may eventually include new apartment and office buildings.

Murphy's venture has a ground lease on the 14-acre-site for an initial term of 99 years, with two options to extend for 25 years each.

The first-phase financing comprises historic tax credits; construction loans from CIBC and private equity firm Ares Management LP; and equity capital from local real estate firms MB Real Estate, Walsh Investors and Granite Cos. and Australia's Plenary Group, the publication noted, citing Murphy.

The first phase is scheduled for completion by summer 2020, according to the report.