Golub & Co. continues to feel the pain of mounting office distress in Chicagoland, as it just handed back the keys to a west suburban office property to its lender.
A venture of Golub and Alcion Ventures relinquished control of the four-building Oakbrook 22 complex by assigning its $57.2 million back to an affiliate of real estate investment firm Heitman, CoStar reported.
The give-back follows an unsuccessful attempt to sell the 389,000-square-foot complex in Oak Brook, roughly 20 miles west of Chicago. When the property hit the market last summer, it was 75 percent leased, according to Cushman & Wakefield. The owners even offered “full-term, interest only seller financing” to combat declining office values and high interest rates.
But in the wake of persistent remote-work trends, which continue to drive up office vacancies to record highs in Chicago’s suburbs, along with tough lending standards, finding a buyer was elusive.
The cocktail of challenges facing Chicagoland’s office sector has prompted a slew of landlords to surrender their assets via deed-in-lieu of foreclosure since last year. Properties selling for far less than they were once worth has also become increasingly common.
The Golub-Alcion venture bought Oakbrook 22 for $57.5 million in 2014 and refinanced it five years later with a $58.1 million loan. The owners spent an additional $26 million on upgrades during their time as landlord, adding fitness and conference centers, outdoor seating and covered parking, the outlet reported.
Golub, led by CEO Michael Newman, has run into trouble with other Chicago-area properties. Golub’s lender took back the 302,000-square-foot International Tower near the O’Hare airport in 2022, three years after providing a $43.4 million loan, which replaced a $28 million loan.
A venture of Golub and CIM Group has a deadline this month to repay the $123 million debt tied to 444 North Michigan Avenue that it took out in 2018 upon purchasing the 36-story building.
Elsewhere, Golub is trying to sell the historic Burnham Center at 111 West Washington Street. If it lands a buyer, the 584,000-square-foot building is likely to sell for less than the $80.3 million Golub paid for the site in 2019.
—Quinn Donoghue
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