Kohan Group Buys Another Distressed Chicago Office Loan

Kohan Retail Investment Group is doubling down on Chicago’s office distress.

The New York-based firm acquired the $60 million mortgage tied to 33 West Monroe Street, a 28-story Loop tower whose value plummeted along with much of downtown’s office stock, Crain’s reported. The mortgage amounts to $67 per square foot.

The firm, best known for buying distressed malls, bought the debt from a venture of Principal Life Insurance, which refinanced the property for landlord AmTrustRE in 2011, according to the outlet.

Transwestern reported last month that the loan was under contract for roughly $25 million — about $28 per square foot — signaling just how far prices for Loop office assets have fallen.

The 900,000-square-foot tower, once home to Arthur Andersen, is about 44 percent leased — well below the downtown average of 72 percent, per CoStar.

The move marks another calculated bet on Chicago’s office slump for Kohan.

The Great Neck, New York-based investor paid $45 million in June for 311 South Wacker Drive, a deal that valued the 65-story tower about 85 percent below its last sale price more than a decade ago.

By buying the Monroe Street debt, Kohan positions itself to take control of the building if AmTrust defaults, which is an increasingly likely scenario as landlords struggle with maturing loans, high interest rates and shrinking tenant demand.

AmTrust, one of the Loop’s most active but embattled office owners, was hit hard in the post-pandemic downturn. It lost 30 North LaSalle Street to foreclosure, faces a lawsuit over its $260 million Illinois Center mortgage, and has flirted with surrendering 135 South LaSalle before pivoting to a planned office-to-resi conversion with local partners under the city’s LaSalle Street Reimagined program.

Whether AmTrust intends to hold onto 33 West Monroe is unclear.

The firm previously hinted at possible renovations as part of a “later phase” of its Chicago reinvestment strategy, but no work has been announced. Kohan, meanwhile, joins a growing wave of New York investors betting on the Loop’s recovery through distressed deals, among them Namdar Realty Group and Mason Asset Management, now in talks to buy 190 South LaSalle Street.

— Eric Weilbacher