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Owner refinances Merchandise Mart debt in $675 million deal

Following a major renovation, the owner of the Merchandise Mart has refinanced the landmark downtown building. | Jacob Wittich / Sun-Times

Merchandise Mart owner Vornado Realty Trust has refinanced debt on the booming office building in a $675 million deal.

The five-year, interest-only loan allows Vornado, which will retire a prior $550 million loan, to pocket $124 million in net proceeds after closing costs, according to the New York company.

Vornado paid $550 million in cash and stock to buy the iconic, Art Deco building in 1998 from the Kennedy family. Since then, it has redeveloped the building on the north bank of the Chicago River downtown, turning into a hub for technology companies, adding the headquarters of Motorola Mobility and Con Agra Foods as tenants in the past two years.

The Mart opened in 1930 between North Wells and North Orleans streets. Built by Marshall Field & Co. as a massive showroom for retailers, it boasted of having more floor space than any building in the world into the 1940s, when it was surpassed by the Pentagon.

In recent years, the building’s massive, open-floor plans have made it popular as office space. Company officials have said the building’s 3.6 million square feet of rentable space is almost completely leased. Vornado finished a $40 million renovation in June.

Beside the Mart, the company’s real estate holdings are mostly in New York and Washington, D.C.