Colorado Investor’s Deal Flops for Chicago Office Discount

Real Capital Solutions’ plan to purchase a 40-story office tower in the Loop fell through the cracks about two months after the deal was announced.

The Colorado firm had plans earlier this summer to pick up the property, located at 190 South LaSalle Street from Boston-based Beacon Capital Partners, CoStar reported. The deal was part of an ambitious plan by the firm, based in the Denver suburb Louisville, Colorado, pledging to spend $3.5 billion in all-cash office deals across the U.S. in the coming years. Most recently, Real Capital made its first Dallas purchase of the 510,000-square-foot Tower at Park Lane for $66 million, or just under $130 per square foot.

The Loop building was marketed by Cushman & Wakefield on behalf of Beacon and U.S. Bank, which are trying to recoup some losses amid mounting pressure on office landlords.

The tower last traded for $230 million ($288 per square foot) in 2019, when Beacon bought it just before the pandemic upended the office sector. The 798,800-square-foot tower has experienced high vacancy in recent years, and Real Capital Solutions was expected to buy the building for less than the $167.5 million loan, provided by U.S. Bank, that Beacon Capital took out on it in 2020.

Real Capital Solutions Chief Acquisitions Officer Adam Abeln neither confirmed nor denied the deal falling through to the outlet, but he did express interest in entering the market.

Sales in the Chicago office market have picked up since last year, albeit by sellers and lenders often conceding to steep losses. The postmodern tower was designed by architects Philip Johnson and John Burgee, built in 1987, and topped with a distinctive green gabled roof. It has continued to lose value as tenants continue to move out.

Beacon invested $13.6 million in renovations to the lobby and cafe, fitness rooms and conference centers since its 2019 purchase. Beacon has had a mixed run in Chicago. It recently unloaded 303 East Wacker Drive at a loss but scoured a deep-discount to buy 333 West Wacker Drive.

— Eric Weilbacher