Ruben Espinoza’s firm is facing a $21 million foreclosure suit for a historic LaSalle Street office building.
The 159,000-square-foot, 16-story building at 19 South LaSalle Street is at the center of the lawsuit, which claims Espinoza Ventures defaulted on its loan tied to the building, Crain’s reported. An entity under Ready Capital filed a complaint against the venture firm in Cook County Circuit Court on behalf of the loan’s bondholders.
The Espinoza venture bought the 129-year-old LaSalle Street office building for $22 million in 2019, when the building was 61 percent leased. The firm took out a $19 million mortgage to secure new tenants, but the pandemic brought those plans to a grinding halt.
In 2021, the building dropped to 56 percent occupancy and generated less than $147,000 in net operating income. By this past June, the property fell to 43 percent leased and appraised at $13.3 million.
When completed in 1893 it was known as the Central YMCA Association Building. It sits at 19 South LaSalle Street. The building is rated “orange” by the Chicago Historic Resources Survey, meaning it isn’t landmarked, but has historical significance.
Chicago had a record-high vacancy rate of 21.2 percent in the city’s central business district — the second-largest in the nation — at the end of March. That vacancy-rate hike was driven by new supply hitting the market rather than tenants pulling out of offices, but office landlords are still struggling.
Mayor Lori Lightfoot is hoping to restore the increasingly vacant area on and around LaSalle Street. The plan is for investors to buy out-of-date office buildings at discounted rates and convert them into residential spaces.
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