A lender that took over a 50-story Loop office tower after it fell into a $237 million foreclosure is booting one of its longtime tenants.
An asset manager in charge of operating 161 North Clark Street on behalf of its lender Société Générale amid the foreclosure lawsuit has moved to evict Amata, a coworking company that caters to attorneys and small law firms that need flexible office space.
Amata is being accused by Xroads — the asset manager whose employee Wes Rehwoldt was the court-appointed receiver for the property during foreclosure proceedings — of falling behind by more than $220,000 in rent and other dues for 40,000 square feet it leases on the 16th and 17th floors, Cook County court records show. The eviction complaint was filed in the middle of last month.
Amata has been a tenant of the 1.1-million-square-foot property for 19 years and operates coworking spaces in several other Chicago-area office buildings, including at 77 West Wacker Drive and 150 South Wacker, in addition to a space just southeast of the city across the state line in Chesterton, Indiana.
Ron Bockstahler, founder of Amata, pointed to increased operating expenses being levied by Xroads since it took over control of the building following the massive loan default by its former owner. The former owner was a venture of the South Korean postal service that opted to walk away from the property rather than try to work out the debt amid the commercial real estate decline sparked by the pandemic and interest rate hikes.
“There is a dispute about the excessive increase in operating expenses the building imposed on Amata, a 19-year tenant,” Bockstahler said. “I’m hopeful we’ll be able to come to a mutual resolution with the building and remain a tenant another 19 years.”
Xroads’ role at the property recently expanded, after it, in partnership with Société, announced recently that a lender-led venture is “in it for the long haul” and preparing to invest in the turnaround of the property.
David Camins of Xroads declined to comment on the litigation, but emphasized the new lender-led ownership’s commitment to the property, which is 86 percent leased and has gained appeal due to its adjacency to Google’s renovation of the Thompson Center and the tech giant’s plan to move into that entire property.
“The building has emerged from receivership with a new ownership group that has positioned the building for success with 75,000 square feet of new leases signed in 2024, a refreshed lobby, and a new coffee shop opening,” Camins said. “This building is a great example of a previously distressed office asset in a tough CRE market that has been properly repositioned with a new ownership group investing in its success.”
It’s unclear how Amata’s struggles are impacting the overall performance of the property, but it’s not the only Chicago office tower with a landlord that’s taken issue with the coworking firm.
Amata filed for Chapter 11 bankruptcy protection in 2021, citing more than $1 million in total liabilities for leases at 150 North Michigan Avenue, 180 North LaSalle Street and 225 West Washington Street, along with the 161 North Clark Street lease, court records show. The bankruptcy case was closed in 2022, and Amata’s website doesn’t display any locations at 150 North Michigan, 180 North LaSalle and 225 West Washington.
Amata’s lease at the Clark Street property had been scheduled to run through 2034, with the rental rate starting at $26 per square foot in 2022, or about $1 million per year for the full two floors, and increasing to $34 per square foot by the end of the term, exhibits in the eviction lawsuit show.
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Société previously shopped the Clark Street property’s loan note in hopes of having another party buy the troubled mortgage debt — likely at a steep discount to the remaining balance — in order to assume ownership of the building. Chicago-based developer Scott Goodman’s firm Farpoint, along with Chicago-based real estate firm Golub, was in talks to partner to buy the asset, but those appear to have stalled out for now as the current lender hangs on.
Real estate services firm Eastdil Secured is still marketing the loan note, and Farpoint was reported to still be working on a deal for the property, which last sold for $330 million in 2013 to the South Korean postal service.
Editor’s note: This story was updated to clarify that Xroads and its employee Wes Rehwoldt are no longer receivers for 161 North Clark Street but are instead the asset manager.