New Yorker buys Fulton Market office condos out of foreclosure

A New York buyer picked up four office condos in Fulton Market, Chicago’s hottest neighborhood, for $16 million after the units faced foreclosure, public records show.

The buyer, an entity managed by Israel Weinberger of Coltown Properties, purchased the condos at 1101 West Lake Street, a six-story, mixed-use office and residential condo building. Bond Collective runs a co-working operation across 31,000 square feet over four floors in the building, which has residential condos on two floors.

The sale resolves a foreclosure suit for the condos filed in Cook County Court in April 2021. The units were secured by an $11 million mortgage issued in January 2019, and were sought through legal action by the loan’s special servicer, Cohen Financial, which represented bondholders who purchased the loan in a package of commercial mortgage-backed securities.

Coltown’s purchase bails out the defendants in the foreclosure case, which include an entity sharing an address with Miami-based Link Real Estate. The property’s valuation shows the rising appeal of both office condos as an asset class, and the Fulton Market neighborhood.

In New York, the office condo sector, while a tiny portion of the overall market, is gaining interest from landlords considering converting buildings struggling with vacancy into office condos. In the second half of last year, office condo sales totaled $179.2 million, 27 percent higher than the five-year average, according to data from New York’s Rudder Property Group.

It’s unclear if Bond Collective’s operation will be impacted by the transaction. Attempts to reach Bond and Coltown for comment were unsuccessful, but Mariah Mell of Bond told Bisnow last month its spaces are luring tenants and its clients are mainly small firms of eight to 10 people.

“We’ve seen a huge upsurge of members coming in,” Mell told the outlet for a March 3 report. “And we signed two more leases just today.”

A stipulation to dismiss the Fulton Market foreclosure case was filed March 8 by the plaintiff. The mortgage was originally sold by New York-based Argentic Real Estate Investment. Link Real Estate held a minority stake in the property, according to the company’s lawyer, Salomon Bagdadi. He did not identify the other parties involved with the sale or offer any other information about the deal.

Office tenants have leased in Fulton Market even during the pandemic while the rest of Chicago’s business districts were rocked by rising vacancies. Another big lease is being considered by Google in a brand new Fulton Market spec office development, which would add to its 500,000 square-foot footprint in the area.

The tech firm has driven the area’s growth – and property values – since it first leased there nearly a decade ago. Two of the condos Coltown just bought were sold in January 2019 for $4.2 million total, meaning their values have almost doubled, assuming a $4 million-per-unit implied value from Coltown’s $16 million purchase of the four units.

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