Sound Point Forecloses on Stanton Road’s Suburban Chicago Asset

Stephen Ketchum’s real estate debt fund has set its crosshairs on a suburban Chicago office deal gone wrong under the direction of landlord Stanton Road Capital.

An affiliate of Ketchum’s New York-based firm Sound Point Capital sued this week to foreclose on a $19.9 million Deerfield office building loan to Stanton Road, the owner of 1751 Lake Cook Road in the northern suburbs.

The landlord is a commercial property investment firm that owns several Chicago-area office buildings. Founded by Timothy Ronan, Stanton has offices in Southern California and Park City, Utah.

Sound Point’s foreclosure filing splashes the 214,000-square-foot Lake Cook Road property into a deep pool of distressed suburban office assets, including several others in Deerfield and nearby suburbs that have similarly sunk deals involving the owners of major downtown Chicago buildings.

With vacancy rates exceeding 30 percent in suburban Chicago offices and elevated interest rates eating into property values established before the pandemic, even some of the biggest names among commercial real estate investors have fallen into trouble with their lenders.

The Deerfield office is one of at least three Stanton owns in the Chicago area, with the others at 200 South Michigan Avenue in the city and at 1933 West Butterfield Road in Downers Grove, a western suburb.

While Stanton’s ownership of those two properties remains intact, it’s under threat in Deerfield, where Sound Point claims the landlord stopped making principal and interest payments in January on its nearly $20 million loan originated in 2018.

That was when Stanton paid previous owner James Campbell Company $18.7 million for the property, with the extra $1.2 million in debt it took on beyond the purchase price from Sound Point likely meant to cover renovations and leasing costs, such as broker commissions and tenant improvement allowances.

Ronan and other Stanton leaders didn’t return a request for comment, and a lawyer for Sound Point declined to comment.

In addition to Stanton’s alleged default triggered by missed loan payments starting early this year, Colliers has filed a lien for more than $289,000 claiming that it has gone unpaid for property management services it’s performed at the property.

There’s also a Colliers lien of more than $229,000 filed in 2023 against the Stanton entity that owns 200 South Michigan in Chicago that also appears unresolved, public records show.

Among the other foreclosure lawsuits targeting Deerfield office buildings is embattled investor Shaya Prager’s Opal Holdings, which is facing a lender’s attempt to strip its ownership of the Corporate 500 office campus on Lake Cook Road for allegedly defaulting on a $106 million loan against the property.

Elsewhere, Chicago-based Baum Realty Group’s David Baum is linked to the buyer of a distressed loan note for a Deerfield office building facing foreclosure that’s owned by Ameritus, owner of a Wacker Drive office tower. And in nearby Bannockburn, the Larry Krueger-led Wanxiang America Real Estate — an owner and investor in several huge Chicago properties — is facing a foreclosure of a 134,000-square-foot building burdened by a $15 million loan with a $12 million remaining balance.