A distressed Oak Brook office building just changed hands at a huge discount, deepening a pattern of haircuts for landlords across Chicago’s western suburbs.
New York–based Ashley Capital paid $10 million for the 183,000-square-foot property at 2001 York Road, about $55 per square foot and roughly 71 percent less than its sale price 12 years ago, Crain’s reported. Colliers brokered the sale for the building; it’s 80 percent vacant.
The building was seized by its lender in December after the previous owner, Pembroke IV, defaulted on a $29.8 million mortgage originated by Minnesota-based Värde Partners, which sold off the loan to commercial mortgage-backed securities bondholders.
Värde and Atlanta-based special servicer Trimont Real Estate Advisors sued for foreclosure in early 2023 and modified the loan to push the maturity to March of last year. When Pembroke failed to pay off the debt, it surrendered the asset. The sale price represents a major loss for Värde and the bondholders that held the loan.
Ashley Capital paid all-cash for the building, which will be mostly vacant after Comcast relocates its suburban office to Schaumburg. The firm plans a full renovation and lease-up campaign, moving its own local office into the building and investing in capital improvements to attract tenants. Ashley intends to self-fund until occupancy reaches a threshold where conventional financing is viable, Colliers said.
The deal is Ashley’s first Chicago-area office acquisition and underscores how investors are snapping up suburban offices for fractions of their pre-pandemic value, betting on an eventual recovery.
It also comes on the heels of another deep discount in Oak Brook.
Earlier this month, Steve Panko paid just under $15 million — about $70 per square foot — for a Clear Height Properties building at 2625 Butterfield Road, after the former owner handed it back to Busey Bank via a deed in lieu of foreclosure. That deal resolved an $18.5 million loan, delivering a $3 million hit to Busey. The building was 82 percent leased at the time of the deal.
The two back-to-back transactions suggest lenders and landlords are accepting mounting losses in Oak Brook, where suburban vacancy rates have are elevated and office values are far off their peaks.
— Judah Duke
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