The Pastorelli family’s Fulton Market property has become a case study in what happens when sellers fall in love with their own price tag.
The longtime home of Pastorelli Food Products at 901 West Lake Street is the subject of a foreclosure lawsuit filed Wednesday by Old Second National Bank — a $3 million reckoning that caps nearly a decade of missed opportunities in Chicago’s hottest neighborhood.
Richard Pastorelli and entities tied to his company defaulted on a $3.4 million loan that matured in May, leaving more than $3 million unpaid plus interest piling up at over $1,000 a day. That’s according to Old Second’s legal complaint filed Wednesday, which shows the mortgage traces back to 2020.
Neither Pastorelli nor Old Second’s attorney returned requests for comment.
In any case, the 12,500-square-foot site’s best chance appears to have come in 2016, when Pastorelli — a fifth-generation operator of the family foodstuffs business — first floated it for sale.
Multiple developers made offers, but Pastorelli soon gained a reputation for pushing his luck on a quest for eight figures. Several developers have said his expectation was clearly out of step with the market for teardown industrial sites poised for residential or mixed-use plays.
Pastorelli might have gotten a reality check from recent turns in the market, but he still seems out of step. Multiple developers told me the property owner called seeking a deal at $12 million, only to be shrugged off. Another neighborhood real estate pro said the market is no longer anywhere near such a price.
Even Sterling Bay — builder of Google’s and McDonald’s corporate offices in Fulton Market — has taken a loss on land in the area recently.
Related Midwest’s plan to build a 43-story apartment tower next door to Pastorelli’s property, which it completed in 2023, probably offered Pastorelli his widest offramp.
Even if Related didn’t offer to buy it (a source told me the firm did), the fact of its project going forward would likely have drawn other interest in the Pastorelli property — if the owner had been reasonable on price.
Pastorelli’s price wasn’t a complete pipe dream. Land values in Fulton Market were skyrocketing before the pandemic.
But there’s some difficulty on the Pastorelli site to contend with: it already holds a 25,000-square-foot building, and even with zoning that brokers over the years have said would allow a 12- to 14-story building, there are “L” tracks running along Lake Street next door. Some developers question whether they could build that big due to the site’s size and location inside a historic district. That all makes redevelopment a little more tricky and costly.
Still, by 2024, with Related having recently completed the 300-unit development project next door, the Pastorelli plant again hit the market, this time under a more formal listing with JLL. The site, zoned for dense development, drew curiosity but no buyers willing to meet ownership’s number.
That’s the rub in this story: a hot neighborhood doesn’t mitigate the gamble that comes with holding out for an ambitious price. Pastorelli bet that Fulton Market’s land values would keep rising faster than developers’ pro formas. Instead, the market moved on, interest rates spiked, and lenders grew less patient. Now, Old Second is asking a judge to foreclose, name a receiver and auction off the property to cover the debt.
It’s a cautionary tale for every owner convinced their dirt is worth more than the last guy’s — especially in a submarket that rewards velocity over nostalgia. Fulton Market has minted fortunes for those who sold or built at the right time. But wait too long, and even a prime corner can turn from opportunity to liability.
Related’s tower has already risen next door, reshaping the skyline. The Pastorelli site, meanwhile, could end up a footnote in the very boom that transformed the longtime home of food businesses in Fulton Market.