Major Chicago-area office landlord Accesso Partners has been struck with its second foreclosure lawsuit in the region as it stares down multiple office loan delinquencies.
The real estate firm, based in Hallandale Beach, Florida, just outside Miami, was sued by LNR Partners for allegedly defaulting on an $18 million loan tied to Park Plaza, a four-story 210,000-square-foot building at 215 Shuman Boulevard in Naperville, DuPage County court records show.
LNR, the special servicer for the commercial mortgage-backed securities loan, claims Accesso failed to pay off the Park Plaza debt when it matured in November last year, and still owes more than $14 million, after accounting for several million dollars the landlord set aside in reserves for the loan. The foreclosure lawsuit follows the property’s largest tenant, insurer Travelers Indemnity Company, opting against renewing its lease and vacating the property in June. Travelers moved to a 70,000-square-foot lease at 3010 Highland Parkway in Downers Grove, earlier this year, a reduction from the 108,000-square-foot space it rented in Accesso’s building.
The suit could be foreshadowing what’s in store for Accesso as it already missed monthly loan payments for a Loop office property at 200 West Monroe Street, where it owes a CMBS lender $75 million, The Real Deal previously reported. The firm is among the Chicago-area office landlords most severely impacted by depressed demand coming out of the pandemic — suburban office vacancy in the region has hovered near a record-high 30 percent this year — combined with higher interest rates for the last two years.
The 23-story Monroe Street property’s debt matured in June, and Newmark is suing Accesso for allegedly shorting the brokerage’s property tax advisory service by nearly $900,000 for its cut of nearly $6 million in taxes it helped the landlord save on the property. Newmark’s suit is still advancing through Cook County court.
Meanwhile, Accesso — which spent nearly $400 million a decade ago to assemble its Chicago office portfolio — is also struggling with the debt load of another suburban Chicago commercial property. It owns a 50 percent stake with Itasca-based Hamilton Partners in the multi-building, 609,000-square-foot Esplanade office campus in Downers Grove, and the property isn’t generating enough revenue to cover the full cost of debt service on its $68.5 million loan, according to Morningstar Credit. The property is just 68 percent leased and only bringing in enough rent to cover 65 percent of the costs of its debt service after expenses.
The landlord has continued to make loan payments on that property, however, while it opted to quit paying the debt service for 200 West Monroe months before its maturity.
Neither Accesso, Hamilton nor LNR Partners returned requests for comment. Attorneys for LNR and Accesso also didn’t return requests for comment. Accesso previously told The Real Deal that it was working to refinance the Park Plaza loan, but its failure to keep Travelers in the property thwarted its chances to get a new loan, Morningstar shows.
It’s unclear what will become of Accesso’s Chicagoland presence, however the picture is bleak across almost its entire portfolio. It sold 230 West Monroe in the Loop — a 696,000-square-foot office tower — to Oregon-based Menashe Properties for just $45 million, a 62 percent discount from the $122 million Accesso paid for it in 2014, and about 48 percent of the property’s former loan balance of nearly $88 million.
While Accesso still owns 20 North Clark Street in the Loop after paying off that property’s loan maturity in 2020, the landlord is also delinquent on its $35 million loan for its two-building, 318,000-square-foot Highland Oaks office campus, also in Downers Grove. The parent company of insurer Blue Cross Blue Shield was that property’s largest tenant and also vacated last year, leaving it just 30 percent leased today, according to loan data. Accesso’s Highland Oaks loan was scheduled to mature this November, and the property’s CMBS lender is also proceeding with a foreclosure lawsuit.
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