“King of the West Loop” could soon be facing a cash crunch

Phil Denny’s real estate investment firm Peppercorn saw its $12.5M loan at 240 N. Ashland enter special servicing

Chicago /
Apr.April 29, 2020 12:00 PM
Phil Denny, 240 N. Ashland (Credit: Google Maps)

Phil Denny, 240 N. Ashland
(Credit: Google Maps)

Real estate investor Phil Denny has a problem. One of his anchor tenants, the photo and video production arm of Crate & Barrel, just left his 80,000-square-foot building on the outskirts of Fulton Market. And the $12.5 million loan on the three-story property at 240 N. Ashland Avenue recently transferred to a Miami-based special servicer, according to Crain’s.

Denny, whose company Peppercorn owns about 25 properties in the West Loop and the city’s Near West Side, told Crain’s that he wasn’t worried about losing the property to a default.

But if tenants at several other properties don’t pay rent in the next few months, he’ll face a serious cash crunch. “We’re preparing for a situation where the demand is so much less that it might be a challenge to carry the buildings for a prolonged period of time,” Denny, who has embraced the moniker “The King of the West Loop,” told the outlet. “That, in my opinion, warranted getting to know the special servicer and getting their opinion.”

Denny’s situation could be a preview of what’s to come for many owners of commercial property in Chicago, as the economic shutdown continues to depress rental collection rates, while mortgage payments pile up, and the prospect of finding new tenants remains slim.

Peppercorn bought the building in 2008 for $13 million and took a $12.5 million loan out in 2015, which was bundled with other loans as part of a commercial mortgage-backed security. Denny tried to sell the property in 2018 as an Opportunity Zone play, but found no takers. Crate & Barrel signed a lease in early 2018 to move to Logan Square.

LNR Partners was appointed as the special servicer to represent CMBS investors. [Crain’s]James Kleimann

 

Related Articles

arrow_forward_ios
66 Orland Square with GW Properties CEO Mitch Goltz and BlitzLake Partners CEO David Blitz (Google Maps)

Facing foreclosure, GW Properties hands over Orland Park shopping center

Facing foreclosure, GW Properties hands over Orland Park shopping center
Industrious CEO Jamie Hodari and 600 West Jackson Boulevard (Google Maps)

Flex-office provider Industrious sued by landlord

Flex-office provider Industrious sued by landlord
The Resurrection Project will renovate and build 150 affordable homes. (The Resurrection Project)

JPMorgan funds construction of prefab affordable homes in Chicago

JPMorgan funds construction of prefab affordable homes in Chicago
Chicago's 105 West Adams Street (iStock, Wikimedia Commons)

Loop office tower faces foreclosure after conversion fails

Loop office tower faces foreclosure after conversion fails
A rendering of Greenhouse in Skokie (Photo via Camburas Theodore LTD)

Marijuana dispensaries level up with sleek design, larger footprints

Marijuana dispensaries level up with sleek design, larger footprints
The Vista Tower Chicago and Magellan CEO David Carlins (Magellan)

What’s in a name: Magellan says goodbye to Vista Tower, hello St. Regis Chicago

What’s in a name: Magellan says goodbye to Vista Tower, hello St. Regis Chicago
Toni Preckwinkle (Getty)

Cook County provides $1M to limit evictions, foreclosures

Cook County provides $1M to limit evictions, foreclosures
HNA Group Founder Chen Feng and 181 West Madison Street (Getty, Google Maps)

Here’s what tenants pay at HNA’s 1M sf Loop office tower

Here’s what tenants pay at HNA’s 1M sf Loop office tower
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...