A landlord with nearly a dozen commercial properties in the Chicago area is facing mounting legal challenges from an investor, a lender and a tenant.
Three pending lawsuits claim longtime local real estate player Ruben Espinoza has failed to pay amounts he owes others, ranging from $300,000 to $3 million.
Espinoza’s most recent spate of legal challenges kicked off when an investor sued him in May for failing to pay back $3 million he borrowed late last year. It’s unclear what the short-term loan, provided by investor Bruce Johnson, was supposed to be used for, but Espinoza allegedly failed to pay it back by the agreed-upon maturity date of Feb. 5, Johnson’s lawsuit said.
Around the same time, Espinoza’s venture, NDR Holdings, was arguing in a foreclosure case that the firm shouldn’t have to fork over nearly $600,000 in insurance proceeds to its lender, a group led by Ready Capital.
The issue stemmed from NDRs’ November 2022 default on a delinquent $21 million commercial mortgage-backed securities loan originated by Ready for a Loop office building at 19 South LaSalle Street, which Espinoza bought for $22 million in 2019.
The judge in the foreclosure case sided with the lender last month and ordered Espinoza to wire $557,000 of the insurance proceeds to the receiver by Aug. 16. The funds had not been transferred as of Aug. 20, according to a legal filing by the lender, and an attorney alleged Espinoza couldn’t be reached.
On top of the judge’s order, this summer proved to be a troubling period for Espinoza — who also owns loft office buildings on Ohio Street in River North, among other large commercial properties — for another reason.
On Aug. 1, a local soccer club was supposed to move into a warehouse space owned by Espinoza, at 2600 East 35th Street between Little Village and Brighton Park. The club was unable to move in, however, because a furniture store that occupied the space had yet to move out, despite Espinoza’s assurances that the retailer would vacate by June 1.
The club had planned to retrofit the space as an indoor soccer facility with a bar but was unable to get into the premises before or even after the lease’s scheduled start date and ran into zoning issues that the club claims had not been discussed in the process of securing the $52,000 per month lease.
In late July, the club sued Espinoza claiming he refused to refund its $330,000 security deposit despite its inability to use the space.
Attorneys for Espinoza and the plaintiffs in the lawsuits did not respond to requests for comment.
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