West Coast Investor Buys Foreclosured Lake Forest Offices

A California investor is betting Chicago’s battered suburban office market has finally hit bottom.

A venture of Petaluma, California-based STG Group paid just over $9.3 million for the two-building Conway Park office complex at 100 and 150 North Field Drive in Lake Forest, according to a source familiar with the deal, first reported by Crain’s. The purchase pulls the 225,354-square-foot property out of receivership and resolves a $28 million foreclosure lawsuit filed in 2024 against an affiliate of Pembroke IV. The sale equates to just over $41 per square foot.

The price is a fraction of what the previous owner had invested. Pembroke IV paid about $19.4 million for 100 North Field in 2016 and another $12 million for 150 North Field in 2021, then refinanced the pair with a $33 million loan from Money360, according to the outlet. After allegedly missing a payment in June 2024, the Bryn Mawr, Pennsylvania-based firm was hit with a foreclosure complaint tied to a $28 million outstanding balance.

STG emerged as the winning bidder at auction for the Class A buildings, which are roughly 45 percent leased. Financial services firms Truist and Stifel are among the largest tenants. A marketing flyer from Frontline Real Estate Partners projected more than $600,000 in net operating income last year, implying a cap rate of about 6.4 percent based on the purchase price — well below the roughly 9 percent average for suburban office sales nationally in mid-2025, according to Trepp.

The Chicago suburbs have shed roughly 5.3 million square feet of office tenancy since early 2020, according to JLL, pushing vacancy to record highs for five consecutive years. Still, investors have begun circling distressed assets. A venture of Beverly Hills-based Tryperion Holdings recently paid $59 million for Mid America Plaza in Oakbrook Terrace, another vote of confidence in well-located suburban properties.

STG, which focuses on underperforming properties, already owns buildings in Barrington and Skokie.

— Eric Weilbacher