Lender Selling Alvarez & Marsal’s Troubled Wacker Drive Office Debt

A 23-story office tower on Wacker Drive in Chicago’s Loop hit the market in hopes of finding an investor keen to buy at a discount through a distressed loan sale.

Boise-based lender A10 Capital is seeking a buyer for the $27.5 million loan tied to 205 West Wacker Drive, the outstanding principal on a $35 million mortgage the property’s owner, Alvarez & Marsal Property Investments, took out on the building in 2015, Crain’s reported.

A10 Capital hired JLL brokers Tom Hall, Jaime Fink and Kyle Kaminski to market the loan, providing a path for investors to acquire the building through a “consensual deed-in-lieu,” in which Alvarez would surrender the property provided the loan is sold. The landlord has been in default on the mortgage since June 2024, according to JLL.

The 271,000-square-foot office tower was originally built in 1928 and last sold for just under $23 million in 2013, or less than $84 per square foot. At the time it was sold to Chicago-based investor Ameritus through an ownership venture, according to Cook County records. Alvarez became the manager of that venture in 2015 and refinanced the property through A10.

Assuming a buyer for the loan note emerges and finds a way to seize the keys from Alvarez, the Wacker Drive building will mark the landlord’s third Chicago property lost amid financial distress in the post-pandemic office rout.

Alvarez faced a $22 million foreclosure lawsuit initiated last year by a group of bondholders in the mortgage debt for 205 West Randolph Street. The lender is set to become the owner of that 23-story, 199,000-square-foot building in coming weeks when a court finalizes a foreclosure sale that occurred this summer, according to public loan data.

And earlier this year, Alvarez sold off 303 West Erie Street in River North to a joint venture of Cubed Real Estate and developer R2 for $7.5 million, half of what Alvarez paid to buy it in 2017.

The Wacker Drive property was last renovated in 2014 and has struggled like many downtown office buildings through the rise of remote work since the onset of the coronavirus pandemic. The building is currently 43 percent leased, according to JLL.

It would be a prime candidate for other uses, as existing zoning on the property would allow for multifamily or hotel conversions, according to JLL. If a developer takes on such a transformation, the property would join the slew of office-to-residential projects currently underway or proposed in the Loop and surrounding areas, some of which have snagged taxpayer subsidies.

— Eric Weilbacher