Chicago’s commercial real estate market broke records this year but not in a good way.
Countless landlords defaulted on loans due to the rise of remote work, high interest rates and a tough lending market, all amid office vacancy stats that continued creeping up to all-time highs throughout 2023.
Most of Chicagoland’s high-profile lender lawsuits were tied to office buildings, but a few retail, hotel and multifamily landlords made their way through Cook County foreclosure court, as well. Many other real estate borrowers otherwise avoided legal proceedings through friendly givebacks of their properties to creditors.
Loop and suburban office buildings were hit particularly hard, as they’ve gotten passed up by tenants in the market who’ve opted to lease newer commercial spaces in buzzy Fulton Market, the only area of the city where a new major office development broke ground this year.
Among the biggest defaults in the Chicago area were a $230 million foreclosure on North Clark Street and a string of troubled properties along LaSalle Street, the city’s historic financial corridor.
While some borrowers and lenders are still jousting over how to handle a few big foreclosure disputes started earlier during the pandemic — including at the Civic Opera office building and the Palmer House hotel — The Real Deal tallied the largest newly filed foreclosures lawsuits in the Chicago area in 2023. Properties are listed below along with their initial mortgage amount. Some foreclosure lawsuits were filed for less than the initial mortgage if the loan was partially paid off. Other lawsuits were filed for more than the original loan amount due to interest and other fees.
French lender Societe Generale filed for foreclosure on a Loop office building after trying to sell the debt it issued on the property.
The 49-story building at 161 North Clark Street spans more than 1 million square feet and was owned by a group of investors led by Korea Post, the national postal service of South Korea.
Lenders and their lawyers filed some of the largest foreclosure complaints ever for properties in the Windy City and its suburbs this year
From left: Roy Gori; Slawomir Krupa; Rick Charlton; 9399 West Higgins Road; 200 South Wacker Drive; 161 North Clark Street (Getty, Google Maps, LoopNet, Manulife, LinkedIn)
Chicago’s commercial real estate market broke records this year but not in a good way.
Countless landlords defaulted on loans due to the rise of remote work, high interest rates and a tough lending market, all amid office vacancy stats that continued creeping up to all-time highs throughout 2023.
Most of Chicagoland’s high-profile lender lawsuits were tied to office buildings, but a few retail, hotel and multifamily landlords made their way through Cook County foreclosure court, as well. Many other real estate borrowers otherwise avoided legal proceedings through friendly givebacks of their properties to creditors.
Loop and suburban office buildings were hit particularly hard, as they’ve gotten passed up by tenants in the market who’ve opted to lease newer commercial spaces in buzzy Fulton Market, the only area of the city where a new major office development broke ground this year.
Among the biggest defaults in the Chicago area were a $230 million foreclosure on North Clark Street and a string of troubled properties along LaSalle Street, the city’s historic financial corridor.
While some borrowers and lenders are still jousting over how to handle a few big foreclosure disputes started earlier during the pandemic — including at the Civic Opera office building and the Palmer House hotel — The Real Deal tallied the largest newly filed foreclosures lawsuits in the Chicago area in 2023. Properties are listed below along with their initial mortgage amount. Some foreclosure lawsuits were filed for less than the initial mortgage if the loan was partially paid off. Other lawsuits were filed for more than the original loan amount due to interest and other fees.
161 North Clark Street | $230 million
French lender Societe Generale filed for foreclosure on a Loop office building after trying to sell the debt it issued on the property.
The 49-story building at 161 North Clark Street spans more than 1 million square feet and was owned by a group of investors led by Korea Post, the national postal service of South Korea.
CBRE Investment Management bought the building on behalf of the Korea Post fund from Tishman Speyer for $331 million in 2013, according to Cook County records. It was 93 percent leased at the time of the purchase, but took a turn for the worse since the landlord refinanced in 2018 with a $230 million mortgage from Societe Generale.
At the time of the foreclosure, the entire $230 million principal of the loan was unpaid, as well as $5.3 million in accrued interest and $1.2 million in default interest.
