Shopoff Faces $39M Foreclosures of Chicago Office Buildings

Two more foreclosure lawsuits filed by a lender for River North and Fulton River District offices prove that Chicago’s real estate distress isn’t limited to the Loop.

Slate Asset Management hit California-based Shopoff Realty with foreclosure complaints for two office buildings, seeking almost $25 million for alleged missed payments and interest, plus $14 million in damages for breach of contract.

The buildings span a combined 170,000 square feet, at 224 North Des Plaines Street in the Fulton River District, and 900 North Franklin Street in River North.

Shopoff has owned them since 2016 and refinanced with Slate in April 2022.

For 224 North Des Plaines, Shopoff borrowed $13.5 million, and for 900 North Franklin, it took out $14.6 million, according to Cook County mortgage records.

That $28 million in debt comes to about $165 per square foot.

The loans were set to mature in April 2025, and Slate alleges the payments stopped in November. The lender issued notices of default and accelerated those notices in December, setting a Jan. 10 deadline for Shopoff to make up missed payments.

When that didn’t happen, Slate filed the foreclosures on Jan. 29. The lender is seeking almost $12 million in unpaid principal and interest for 224 North Des Plaines Street and nearly $7 million in damages for breach of contract. For 900 North Franklin, it is seeking almost $13 million in unpaid principal and interest and over $7 million in damages for breach of contract.

Representatives of Shopoff and Slate did not respond to requests for comment.

The properties’ struggles follow a turnaround project by their previous Chicago-based owner R2 Companies.

R2 bought the buildings out of distress for over $22 million in 2014 and sold them to Shopoff for $37 million in 2016. That’s almost $218 per square foot. At the time, they were fully leased, aside from ground floor retail space at the Des Plaines building.

R2 offloaded the Des Plaines and Franklin office buildings at an opportune time, and the firm is snapping up office properties at bargain prices. R2 recently bought the 41-story tower at 150 North Michigan Avenue from CBRE Investment Management for $60 million, or about $92 per square foot.

The sale was a massive loss for CBRE, which had bought the building for $121 million in 2017 and put in another $35 million in renovations.