KBS Realty Advisors Secures Vital Chicago Office Loan Extension

KBS Realty Advisors has secured a much-needed loan extension on its West Loop office tower.

U.S. Bank granted the Newport Beach-based company up to a three year extension on a $375 million loan tied to Chicago’s 40-story Accenture Tower, located at 500 West Madison Street, CoStar reported. The agreement pushes the loan’s maturity to Nov. 2, 2026, with an optional 12-month extension contingent on specific terms and conditions, according to a regulatory filing.

The original three-year loan, initiated in November 2020, comprised $281.3 million in term debt and $93.7 million in revolving debt. At the time the loan matured, KBS secured a short-term extension to Dec. 4, 2023.

The outstanding principal balance of the loan was $306 million as of Dec. 20, 2024.

CEO Marc DeLuca also shored up $16 million to the balance, signaling a strengthened financial position to support the property. The extension and increased capital will offer KBS better financial stability as it navigates broader industry challenges.

Earlier this year, the company dealt with significant troubles, including a $2.7 million embezzlement case involving its former chief auditor, and the surrender of an 18-story office building in San Francisco’s Financial District to its lender.

Accenture Tower was built in 1987 and spans 1.5 million square feet. The building is connected to the Ogilvie Transportation Center, providing direct commuter rail access.

The firm recently invested $10 million in renovations, including an expanded lounge, outdoor terrace, and new conference center, aiming to enhance tenant appeal amid a challenging office market. These renovations, along with speculative suite buildouts, have helped the property achieve 95 percent occupancy.

Consulting firm Accenture, the building’s namesake tenant, occupies 260,000 square feet after expanding its lease in 2019.

While KBS was able to secure a necessary extension, the situation highlights the difficulties office landlords face in refinancing debt due to changing market conditions and lender requirements.

These challenges are most evident with KBS Realty Advisors’ real estate investment trust, which recently sold its last office asset in Houston for $17.6 million, marking a 63 percent discount. The property was sold to New Jersey-based Capital Commercial Investments, as part of its liquidation plan. The sale followed a failed transaction with Red River Asset Management, which defaulted on the purchase agreement, leading to the forfeiture of an $800,000 deposit. The REIT had been struggling with financial instability, including a $350 million decline in portfolio value, attributed to the pandemic and downturns in the oil market

— Andrew Terrell