FTK Capital Acquires Loop Office High-Rise at Discount

A New York investor is making moves in Chicago’s battered office market, picking up a distressed Loop high-rise at a fraction of its former value.

An affiliate of FTK Capital paid $25 million for the 24-story office building at 111 West Jackson Boulevard after acquiring the property’s troubled $105 million loan and seizing the building through foreclosure, according to people familiar with the deal who spoke to Crain’s. Commercial Observer first reported the loan sale.

The purchase price equates to roughly $44 per square foot for the 567,000-square-foot building — about 81 percent below its 2013 sale price, highlighting a steep reset in downtown office values. The deal adds to a growing list of deeply discounted trades in the central business district, including recent sales of buildings at 401 North Michigan Avenue, 175 West Jackson Boulevard and 161 North Clark Street.

FTK, led by Brooklyn-based investor Simon Singer, is betting that fresh capital and leasing efforts can stabilize a property that has been hit hard by post-pandemic tenant flight. Crain’s reported that the 66-year-old building was just 48 percent leased as of February, down from 93 percent in 2019, according to court records.

To reposition the high-rise, FTK tapped Chicago-based Stream Realty Partners to oversee leasing and management. Plans call for upgrades to the lobby and common areas, new amenity spaces and roughly 50,000 square feet of move-in ready suites aimed at attracting smaller or more flexible tenants, according to the outlet.

The property’s previous owner, an affiliate of New York-based Melohn Group, lost the building after a foreclosure suit, filed in 2023. Melohn had paid $135 million for the building in 2013 and invested more than $38 million into renovations and leasing, pushing its appraised value to $163 million at one point. That equity was wiped out in the foreclosure, according to the publication, dealing losses to bondholders tied to the commercial mortgage-backed securities loan.

Like many Loop offices, the building’s financial performance deteriorated sharply. Net cash flow before debt service fell to just under $2 million in 2024, down from $8.3 million in 2019, according to Bloomberg data.

— Eric Weilbacher