No asset class is safe from a failed sale. Deals are getting canceled at high rates for both Chicago home sales and massive office towers weighed down by financial distress.
For housing, the summer brought an uptick in buyers bailing on home purchases, reflecting rising borrowing costs and growing economic jitters.
Yet wealthier buyers remain undeterred, even after taking painful losses. The couple behind a huge insurance business bought a $6 million Gold Coast condo after losing $50 million on their sale of a Lincoln Park home considered Chicago’s most expensive residential property. Outside the city, buyers looking in Lake Geneva have two more waterfront options about to hit the market for nearly $10 million apiece, providing rare public listings on the shoreline.
Turning to the suburbs, multifamily is flexing. Solomon Organization dropped $136 million on a 640-unit Naperville complex, marking the most expensive suburban apartments transaction of 2025. Backed by a $91 million Berkadia loan, the purchase underscores investors’ appetites for strong suburban rent growth, even in a high-rate environment.
Meanwhile, the downtown office sector is in rougher shape. Real Capital Solutions had plans to buy the 40-story 190 South LaSalle tower at a steep discount, but the deal collapsed. Elsewhere, Orion Properties is demolishing the former Walgreens office campus in Deerfield to re-market it as a clean slate. The 37.5-acre plot is being pitched for redevelopment into everything from housing to data centers, reflecting the wave of suburban office conversion projects.
Lenders are increasingly taking hands-on roles in repositioning assets. Morgan Stanley’s mezzanine debt unit Mesa West Capital revived ownership of 123 North Wacker Drive, a Chicago office tower it seized after its previous owner’s loan problems.
And Dry Creek Capital, a buyer of troubled debt, snapped up the distressed loan note on Bridge Investment Group’s suburban office building. It sets up the 530,000-square-foot property called O’Hare International Center to be surrendered by the landlord as Dry Creek takes a backdoor path to control the building, like it did with a former Farbman Group-owned property at 25 Northwest Point Boulevard in Elk Grove Village.
Meanwhile, multifamily player Pangea Properties settled a long-running whistleblower lawsuit brought by a former employee that alleged the firm overcharged the Chicago Housing Authority for federally subsidized tenants by inflating market rents. Former Alderman Walter Burnett Jr.’s nomination to head the embattled CHA is set to be voted on this coming week.