A pair of troubled Loop office buildings will test the market as Chicago’s office sector remains sluggish.
The 49-story building at 161 North Clark Street and the 29-story building at 230 West Monroe Street are up for grabs, both deep in debt and worth far less than what was invested in them, Klein’s Report.
A group of banks led by Paris-based Societe Generale, the lender for the 1.1 million-square-foot Clark Street tower, plans to hire brokers to sell the property’s $230 million loan. The owner is a Korea Post company. Experts believe the building is worth far less than the $230 million loan, marking a potentially large loss for the joint venture, which paid about $331 million for the tower in 2013. The loan will mature in 2025.
The Monroe Street building was recently listed for sale and is being marketed by real estate services firm Eastdil Secured. The owner, a joint venture of Florida-based Accesso Partners, bought the 623,000-square-foot property in 2014 for $122 million and paid $87.7 million through Morgan Stanley in 2019, the outlet said. USD loan to refinance it. People familiar with the listing estimate the building is worth closer to the amount of the Morgan Stanley loan than Accesso’s purchase price.
Office properties are selling for well below what investors had previously paid for the site, as is common in today’s market. The remote working movement sparked by the pandemic is still ongoing. Vacancy rates in Chicago have recently hit record highs, and many companies have experienced mass layoffs, resulting in a large number of office downsizing and sublease listings.
However, a spokesman for Accesso believes the company will strike a favorable deal for the Monroe Street building.
“Over the course of our ownership of 230 West Monroe Street, we have created tremendous value through hands-on property management and upgrading the interior of the property,” the spokesperson told the store. “The asset sale allows us to recoup our investment while using the proceeds to reinvest in our portfolio.”
— Quinn Donoghue
