An Irish real estate investor handed a Loop office building that houses a Morton’s Steakhouse to its lender to avert foreclosure after failing to find a buyer.
Wilton U.S. Commercial, a REIT that lets Irish investors wager on the U.S. commercial property market, transferred ownership of the 24-story Art Deco building at 65 East Wacker Place to Acres Capital, Crain’s reported. It was a deed-in-lieu of foreclosure, meaning that Wilton released the property rather than face a suit due to missed loan payments, Crain’s said, citing a person close to the transaction,
The 226,000-square-foot building was 60 percent leased when Wilton hired CBRE to sell the property last fall. About the same time, an Acres venture took control of the loan. Wilton hoped to sell the building for at least as much as the $24.4 million loan it had on the property.
Director Iain Finnegan said Wilton lost some non-profit tenants in the building “due to a lack of state funding” and the pandemic made it too difficult to recover, leaving the company with the choice to either restructure or sell the asset.
Wilton bought the building in 2010 for less than $16 million. The property had been seized by what is now CIBC through a foreclosure. After losing tenants over the years, Wilton struggled to cover the $1.3 million debt service payment in 2019 after generating less than $375,000.
The Morton’s has occupied the first two floors since signing a 15-year lease in 2005. The largest tenant is the Pacific College of Health & Science, a therapy school that leases 19,000 square feet. That lease runs through the end of 2025.
Other Chicago properties have also been involved in foreclosure issues. The owner of a 487,000-square-foot office building at 401 South State Street faced a suit over its $47.8 million loan and, more recently, the owner of the Civic Opera Building in the West Loop was hit with a $195 million foreclosure suit.
[Crain’s] — Victoria Pruitt