Rissman Lists Evanston Office Building at Sharp Discount

A prominent local investor is preparing to take a significant loss on a suburban office property, marking another chapter in the ongoing devaluation of Chicago-area commercial real estate.

Glencoe-based investor Randy Rissman listed the 10-story office building at 500 Davis Street in Evanston, according to Cook County property records and first reported by Crain’s. Rissman’s venture originally acquired the 125,285-square-foot building for just over $32 million in December 2018. The property is now being positioned for a sale that could represent a fraction of that previous valuation.

While an official asking price has not been set, industry sources familiar with the offering anticipate bids to fall between $10 million and $15 million, according to the publication. This price range suggests a potential loss of more than 50 percent of the initial investment for the ownership group.

A sale at the projected level would likely eliminate the owners’ equity and create a shortfall for the lender, an affiliate of San Antonio-based Affinius Capital. Public records indicate that Affinius provided a $21.5 million mortgage to finance the 2018 acquisition.

Marketing materials from Colliers frame the listing as a short sale, a strategy aimed at avoiding a formal loan default or foreclosure process before the debt matures in late 2028, according to the publication.

The building’s occupancy has struggled significantly, currently sitting at 62 percent compared to the 96 percent level maintained at the time of purchase.

The Evanston listing also follows news that Rissman is under contract to sell a West Loop office building at 600 West Fulton Street for about $18 million. That deal, currently tied to Chicago developer R2, represents a steep discount from the $31.7 million Rissman paid for the property in 2006.

The 48-year-old Davis Street building includes a three-story parking structure with 250 spaces and caters primarily to small office users. Colliers is marketing the property based on its “strong in-place cash flow” and the potential for upside through aggressive new leasing efforts, according to the outlet.

The property currently maintains a weighted average lease term of 4.8 years.

Rissman, known for co-founding Tiger Electronics, remains an active player in the Chicago market through other ventures. His portfolio includes the former WeWork property in Fulton Market, which is currently occupied by the co-working firm Workbox.

— Eric Weilbacher