John Hancock Hits Jewelers Building Owner With Foreclosure Suit

A Wacker Drive landmark has been hit with a $65 million foreclosure suit.

Lender John Hancock Life Insurance filed a complaint against Canada-based Dorchester Corporation over the Jewelers Building last month, days after it was reported that the 40-story office tower at 35 East Wacker Drive was for sale. John Hancock and Dorchester did not respond to requests for comment.

The lender also filed a motion to appoint John Rothschild from the Columbus, Ohio, office of Newmark as the receiver for the 560,000-square-foot property and said in a court filing that the motion will be unopposed. Rothschild declined to comment. Cook County court records show a July 19 hearing date has been set so a judge can determine whether or not to have Rothschild take over the building’s operations while the foreclosure suit plays out.

Boston-based John Hancock issued the loan in 2013; it matured July 1, according to court documents. In April, Dorchester informed John Hancock that it had paid about $1.3 million of the $2.3 million due in property taxes and other charges, which constituted an event of default under the terms of the mortgage, the foreclosure suit said.

Dorchester had hired Draper & Kramer to market the building to potential buyers, pitching it as an opportunity for an office-to-residential conversion, according to May news reports. There wasn’t a specific asking price, but Dorchester was aiming to land a deal that would allow it to pay off its $51 million in debt before its maturity date.

The Canadian investor, whose CEO is Morris Shohet, has owned the 1920s-era, Beaux Arts-style building overlooking the Chicago River at the corner of East Wacker Drive and Wabash Avenue for 40 years and now joins the growing group of landlords of old-school trophy properties, including the Civic Opera Building which is also on Wacker Drive, where lenders are closing in as the central business district contends with record-high office vacancy.

The building’s largest tenant is Chicago-based construction firm Clayco. Its second-largest, the architecture firm Jahn, moved its offices to the Wrigley Building at 410 North Michigan Avenue last year.