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Kamco Invest – Saudi concludes first tranche of a Junior Financing transaction for a real estate development project in Fulton, Chicago, US

Kamco Invest - Saudi announced today the closure of the first tranche of the Sharia-Compliant junior funding for the development of a prime Class A office and retail property in the Fulton market of Chicago.
The property is strategically located in a core midtown location of the Fulton Market, which is fueled by the vibrant shopping and dining options and is the new preferred neighborhood for Chicago’s affluent after having undergone years of transformation and construction. The project entails the development of a vacant plot of land into creative office and retail space and has been 35% pre-leased to Harrison Street Real Estate Capital (“Harrison Street”) for 15 years. It is anticipated that the property will be 100% stabilized throughout the construction period or immediately after completion of the development, and which is supported by the supply and demand fundamentals of the Fulton Market.
Upon completion of the development, the property will feature an 11-story building with a total rentable square foot of 373,053. This comprises 350,534 square foot of office space (94% of rentable square foot) and 22,518 square foot of ground floor retail (6% of total RSF) and 76 parking stalls.
The property is being developed by a premier team of developers, general contractors and consultants who have an established presence and extensive track record in delivering multiple development projects in the Fulton Market on time.
Mohammed Hamad Alfaris, Chief Executive Officer of Kamco Invest – Saudi commented, “I am delighted by the successful closure of the first tranche of this transaction, a Sharia-Compliant Junior Financing for a real estate development in the US. This is a significant milestone reflecting the expertise, accessibility to key transactions and the track record our real estate team has built over the past years with a portfolio of 21 properties valued at USD1.8bn.”
The transaction has been well perceived by investors driven by the lower risk the junior financing provides, the investments being a Sharia-Compliant, and the attractive returns it offers with quarterly distributions from project inception. Moreover, the transaction enjoys two exit options through refinancing or property sale, and the funding is further backed by a prominent regional US bank and an international insurance company.
Alfaris added, “The overwhelming appetite received from investors reflects not only the competitiveness of the returns but also the project's strong viability. Moreover, the high-profile and robust financial position of the equity sponsors, developers, consultants, and tenants underscore the confidence in this endeavor.”

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