Hamilton Lands Tenant at Debt-Pressured Suburban Chicago Office

Hamilton Partners scored a tenant at its Esplanade IV office building in Downers Grove, a win for the landlord as it scrambles to stabilize its troubled suburban office complex it co-owns with Accesso Partners.

Matson Logistics, a transportation and supply chain company, leased nearly 21,000 square feet at 1901 Butterfield Road, Crain’s reported. The firm will relocate from a 17,000-square-foot space at 1815 South Meyers Road in Oakbrook Terrace this August.

The deal was brokered by Colliers’ Sven Sykes, Tom Volini and Brent Jacob for Matson, and Phil Sheriden for Hamilton.

The move boosts Esplanade IV’s occupancy to 80 percent, according to CoStar, and reflects the “flight to quality” trend among tenants seeking modern offices to entice workers.

The lease follows a recent restructuring of the building’s debt. Hamilton and Accesso struck a deal with lender Jackson National Life Insurance to cut their $30 million loan on Esplanade IV and neighboring Esplanade V to $19.6 million, extending its maturity to 2028.

But the landlords face a more urgent threat next door. Esplanade I, the 19-story, 536,000-square-foot anchor of the campus, is tied to a $69 million CMBS loan that was transferred to special servicing in February.

Hamilton, a minority owner, has begun workout talks with servicer CWCapital, but its larger joint venture partner, Accesso, has so far declined to reinvest, pushing Hamilton to shoulder turnaround costs and risk diluting Accesso’s equity stake.

Accesso is juggling distress elsewhere in its portfolio, having surrendered a Loop tower at 20 North Clark and facing a $75 million foreclosure at 200 West Monroe. Several of Accesso’s suburban Chicago assets, some of which were purchased from Hamilton, ended up in foreclosure.

At Esplanade I, occupancy stands at 72 percent, but revenue has fallen below breakeven levels. Its former anchor tenant, Hillshire Brands, exited a 72,000-square-foot annex in 2023, and Hamilton is now targeting food processing tenants to backfill the space.

Meanwhile, the building Matson is exiting in Oakbrook Terrace is struggling too. Its $19.3 million CMBS loan was recently transferred to special servicing after the loss of Matson and marketing agency InteQ.

— Judah Duke