Housing Authority Expands in Distressed LaSalle Street Tower

Suburban Cook County’s affordable housing agency is bucking the office space-shedding trend in Chicago’s central Loop. It is doubling its lease size in a LaSalle Street tower thrust into receivership last year following troubled debt specialist Rialto Capital’s $105 million foreclosure lawsuit against New York-based landlord Feil Organization.

At 10 South LaSalle Street, the Housing Authority of Cook County not only renewed its commitment to the building, but expanded to nearly 47,000 square feet from just under 23,000 square feet, according to a social media post by brokerage Transwestern, which arranged the deal.

The housing authority, which previously leased the 22nd floor, is relocating into a two-floor office spanning the 30th and 31st floors, according to the agency’s records.

The timing of the Housing Authority’s expansion in the 37-story, 776,000-square-foot tower is notable. Nonprofit and government agencies, attracted by the prospect of discounted rents as office property values drop, have made a habit of filling spaces in Loop towers that fell into distress as the post-pandemic market sapped commercial real estate demand. Earlier this year, the federal government’s General Services Administration entered talks to lease 100,000 square feet at the nearly half-vacant Beacon Capital-owned building at 231 South LaSalle Street, space that would be occupied by the U.S. Railroad Retirement Board’s headquarters.

“Receivership can sometimes carry a stigma in our industry, but the reality is often quite different,” Katie Steele of Transwestern’s leasing team for 10 South LaSalle wrote on social media. “In many cases, it can be the moment when a building finally receives the focused oversight and operational discipline it needs to succeed. For tenants, it creates a reliable future while a property resets and improves.”

Transwestern’s Kathleen Bertrand worked alongside Steele on brokering the housing authority lease, while the tenant was represented by Cushman & Wakefield’s Steve Schneider and Chip Evans.

Despite the leasing win, the property’s financials remain a stark reminder of the wall of loan maturities facing commercial real estate. The 10 South LaSalle foreclosure represents the biggest bout of distress of several that landlord Feil Organization has encountered in Chicago. In the last few years, the landlord surrendered a River North loft office property to lender Beltway Capital to settle a foreclosure lawsuit, and last year Feil was hit with two more foreclosure complaints for a West Loop office property as well as Lincoln Park retail. A Feil Organization spokesperson didn’t immediately return a request for comment.

Feil has owned the building at 10 South LaSalle since 2002, when it paid $139 million to buy it. But it’s worth far less than that today: The property was appraised at just over $30 million in July, according to public loan data. Feil refinanced in 2016 with the $105 million loan now facing Miami-based Rialto’s foreclosure lawsuit, meaning bondholders in its commercial mortgage-backed securities package could face losses.

The building’s mortgage reached its final maturity date in January. With no buyer on the horizon and the capital markets largely frozen for office debt, the loan has officially been categorized as a non-performing note with a balloon amount past due. Monthly payments on the loan ceased in June 2025, according to loan data, leaving the property in default.