Loan for Full Price of Building Signals Rare Office Comeback

Two years after snapping up a distressed Loop office tower in an all-cash deal, an Oregon investor pulled off a financing maneuver that all but disappeared from the downtown Chicago office market: a loan equal to the full purchase price.

Portland-based Menashe Properties secured a $45 million loan from Goldman Sachs Private Wealth Management’s bank lending group on the 29-story tower at 230 West Monroe Street, CoStar reported. The loan matches exactly what Menashe paid for the building in September 2023, when it bought the property outright and ended a more than yearlong drought in major downtown office sales.

Full-value financing is rare in today’s office market and suggests the building’s value has rebounded sharply since Menashe bought it at a steep discount, according to the publication. The tower last traded in 2014 for $122 million, a reminder of how far pricing fell during the pandemic-era collapse.

The deal stands out nationally after years of plunging office valuations driven by remote work, higher interest rates and corporate downsizing. Menashe Properties CEO Jordan Menashe said the market has quietly begun to shift, as obsolete buildings are converted to other uses and new office construction has ground to a halt.

Menashe told the outlet that the firm was “blessed” by its timing of the 2023 purchase, landing at or near the bottom of office market values.

Chicago has already seen a handful of high-profile refinancings that hint at a bifurcated recovery. Trophy assets like the Old Post Office, Salesforce Tower and Bank of America Tower have all landed massive commercial mortgage-backed securities loans, even as older, vacancy-plagued buildings continue to trade at prices that fail to cover their debt.

The loan for the building at 230 West Monroe closed in October, according to Cook County property records, more than two years after Menashe bought the building without acquisition debt because lenders had largely abandoned the sector.

— Eric Weilbacher