Rialto is closing in on a three-building office portfolio in River North after troubled investor Ruben Espinoza failed to pay off a $9.6 million loan tied to the properties.
When a March 20 maturity date came and went, Espinoza had an unpaid balance of $8.7 million and nearly $1 million in interest and late fees on the loan backed by the offices at 215, 221 and 223 West Ohio Street, Rialto’s legal filing states.
Trouble for the loft-style office buildings had been brewing for some time.
Espinoza last made payments toward the securitized loan in June. Wells Fargo originated the loan in 2017 and watchlisted it in August, according to commentary on CMBS loan tracking platform MorningStar Credit.
Rialto took over as the special servicer in November.
Espinoza did not respond to requests for comment.
The investor has been in hot water with several other Chicago properties in his portfolio.
Around the same time that Espinoza fell behind on payments for the West Ohio Street offices, he was hit with three separate lawsuits filed by a real estate investor, a commercial tenant and a receiver. The plaintiffs all allege Espinoza owes them amounts ranging from $300,000 to $3 million.
Espinoza was also hit with a foreclosure lawsuit filed in November by local lender CRE Bridge Capital that was triggered by missed interest payments on a $3.1 million bridge loan. He took out the loan in May along with business partner Robert Habeeb Jr. and almost immediately failed to make interest payments, according to DuPage County records.
CRE Bridge Capital issued the loan to give Espinoza and Habeeb more time to secure construction financing to revamp and reopen a suburban Chicago resort known as the Indian Lakes Hotel.