Rubenstein facing foreclosure on Continental Towers

Philadelphia-based private equity firm defaulted on debt against 1M sf complex

Rialto Capital Advisors to Foreclose on Rubenstein Partners
Rubenstein Partners’ David Rubenstein; Continental Towers at 1701 West Golf Road (Loopnet, Getty, Rubenstein Partners)

Rubenstein Partners is facing an $82 million foreclosure suit from special servicer Rialto Capital Advisors over a Rolling Meadows office complex after defaulting on a loan secured by the property. 

The Philadelphia-based private equity firm’s $85 million CMBS loan on the Continental Towers at 1701 West Golf Road was moved to special servicing in May due to a “borrower-declared imminent monetary default,” according to information from credit ratings agency DBRS Morningstar. The loan was watchlisted in February.

The complex spans nearly a million square feet across three 12-story buildings and has struggled to retain tenants since the pandemic. A February report from Wells Fargo, the master servicer, put the property’s occupancy at about 64 percent. 

Rubenstein paid about $125 million for the property in 2018, according to past news reports. It was the firm’s first and only investment in Chicagoland, according to its website.

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An attorney for Rubenstein did not immediately respond to a request for comment on the suit, which was filed in Cook County circuit court on Aug. 2. An attorney representing the plaintiff said he could not comment on active litigation.

Tech giant Panasonic, which had occupied about 47,000 square feet at Continental Towers, opted not to renew its lease when it expired in December, per Morningstar. 

Rubenstein is far from the only commercial landlord to face loan trouble in suburban Chicago as office vacancy climbed to an all-time high of 29 percent last quarter, according to data from JLL. 

Canadian real estate investment trust Adventus Realty Trust is facing a $114 million foreclosure suit over an office complex it owns near O’Hare International Airport late last month, and a venture of Dallas-based Lincoln Property Company was recently hit with a foreclosure suit over its nearly $80 million loan on the Central Park of Lisle office complex.

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