The country’s foremost holder of distressed commercial property loans added another note to its portfolio last month with the foreclosure of an office complex owned by the son of Chicago real estate power player John Buck II.
The $18 million-dollar note backed by the O’Hare area office building is a small drop in special servicer Trimont’s massive bucket of sub-performing loans. Earlier this week, Trimont agreed to buy Wells Fargo’s non-agency, third-party commercial mortgage servicing business. The deal makes the Atlanta-based company the country’s largest commercial and multifamily mortgage servicer and responsible for $715 billion in loans.
Trimont was already closing in on the 180,000-square-foot O’Hare office property at 6400 Shafer Court in Rosemont before the Wells Fargo deal. In October, the servicer filed a foreclosure lawsuit against John “Jack” Buck III’s firm, Free Market Ventures, after the company failed to pay off its loan on the property that matured the month prior.
The loan was scheduled to come due in January 2022, but the younger Buck received an extension to January of last year, according to DBRS Morningstar. It was then watchlisted — usually a sign a lender believes there’s a growing chance of default — in December 2022.
The maturity date was pushed back again to Sept. 1 of last year, and Trimont indicated at the time that the servicer was in talks with Free Market Ventures to extend the maturity date to this September. Instead, Trimont ultimately filed for foreclosure.
Representatives of Trimont and Free Market Ventures did not respond to requests for comment.
The O’Hare office submarket benefits from its proximity to the airport, however, it has not been immune to the overall downturns hammering the market in the wake of the pandemic.
In a stark sign of distress, Canadian REIT Adventus Realty Trust is on track to lose nearly every property it owns after filing bankruptcy last year. Lenders moved to seize a number of its office properties including its O’Hare-area collection known as Columbia Centre III.
But it hasn’t been all bad news for the area. Its industrial market has fared well in recent years.
In January, Irvine, California-based LBA paid $95 million to buy two buildings suited for logistics and refrigerated storage in nearby Northlake at 555-575 North Northwest Avenue. Newark, New Jersey-based PGIM Real Estate was the seller. The firm paid about $83 million for the buildings, which total 480,000 square feet of rentable space, in 2019.
A month earlier, news broke that the Federal Aviation Administration planned to relocate in 2026 to a 108,000-square-foot space in the O’Hare Gateway Office Center in Rosemont. O’Hare Gateway, comprising two towers at 9500 and 9600 West Bryn Mawr Avenue, was purchased for $73.5 million in 2002 by Coca-Cola bottling magnate Marvin Herb.
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