Mike Reschke fends off another lender, keeps Loop offices

Michael Reschke has, yet again, meandered his way around a tricky situation with a lender that sought to foreclose on a prime piece of Chicago real estate.

Reschke, whose ability to navigate financial risk has been compared to to Nik Wallenda’s daring highwire acts and Harry Houdini’s magic shows, resolved a $50 million foreclosure lawsuit with lender Midland National Life involving 208 South LaSalle Street, Crain’s reported.

The Reschke-led Prime Group purchased a five-story block of offices for an unknown amount above the JW Marriott hotel out of receivership terms. The deal settled a foreclosure complaint made by Midland against a separate venture Reschke had led, with a court-approved payout.

The complaint claimed Reschke still owed a balance for the $47.5 million mortgage on the property and that he defaulted on his loan by mixing funds between the office space on floors 13 through 17, and the newly opened hotel project, called the LaSalle, he developed above that on the building’s uppermost floors.

“I guess a good solution is where everybody thought that they gave too much, and both (parties) are happy or both are a little upset,” Reschke told the outlet. “But it was a fair and equitable solution, and that’s why we agreed.”

The deal extinguished a two-year spat between the two parties, giving Renscke the green light to begin a residential plan at the site. The developer is pursuing a $130 million plan to turn the 222,000 square foot office space into 280 apartments, 84 of them being affordable units, and is seeking tax increment financing or other publicly funded incentives from the city for the project as part of the LaSalle Street Reimagined initiative.

For Reschke, this was one of his many instances of having to make a nifty maneuver to stay out of hot water. The developer has had a longstanding reputation for barely escaping financially and legally challenging situations to maintain his properties.

And even as LaSalle is still dealing with vacancy issues related to the pandemic — with buildings along Chicago’s storied financial corridor faring worse than even the record-high downtown office vacancy average of more than 20 percent — Reschke remains bullish on the area and is showing no signs of slowing down.

He’s called LaSalle the “best street in America,” and has amassed properties along and bordering Chicago’s storied financial corridor. He has already built a Residence Inn in the area, and is partnering with Google to revamp the James R. Thompson Center into the tech giant’s next local offices.

Reschke is in the process of overhauling two other properties adjacent to LaSalle for commercial and residential use, including a $300 million project at 111 West Monroe Street that would convert the former BMO Harris Bank building into a mixed-use property holding both apartments and a club and hotel.

— Quinn Donoghue