Farpoint in line to buy distressed Clark Street office tower

Expected to sell for far less than $230M loan on property

Farpoint Development in Line to Buy Distressed Chicago Tower

Farpoint’s Scott Goodman with 161 North Clark Street (Getty, LinkedIn/Scott Goodman, LoopNet)

Scott Goodman’s Farpoint Development could snag a distressed office tower in downtown Chicago.

The local investor was selected as the buyer of the 1.1 million-square-foot building at 161 North Clark Street, more than four months after lender Societe Generale moved to foreclose on it, CoStar reported

The deal has not been finalized. A sale price hasn’t been disclosed, but the 50-story tower is expected to trade for far less than the $230 million loan that its longtime owners — a South Korean investment group — took out on the property in 2018. The loan amount comes to $209 per square foot.

Cook County records show that it matured in August, several months after the building hit the market. 

The tentative sale marks a notable shift for Goodman, who has typically steered clear of investments in the Central Loop area, the outlet said. Goodman, also the co-founder of Sterling Bay, has been instrumental in driving key investments in other parts of Chicago, such as securing Google’s Midwest headquarters for a redeveloped building in Fulton Market.

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Should Farpoint finalize the acquisition with an investment partner, it would align with recent trends in which lenders provide financing to mitigate losses on previous loans. Similar transactions, like R2’s recent $60 million purchase of the 41-story tower at 150 North Michigan Avenue, reflect this pattern of discounted sales to lure investors during a sluggish period for commercial real estate.

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The city’s office sector, in particular, has been plagued by remote-work trends, high interest rates and tough lending standards. 

Redeveloping the 161 North Clark tower may require substantial capital to enhance amenities and fill at least 30 percent of its vacant space. However, Farpoint is likely banking on a discounted price tag to accommodate upgrades and leasing costs, while leaving room for profit.

Along with the R2 acquisition, other Chicago office properties to change hands this year include the five-story building at 100-112 South State Street and a West Loop office building at 300 West Adams Street

—Quinn Donoghue