The walls are closing in on high-rise restaurateur and South Side landlord Jiazhao “Frank” Chen.
A lender brought a new foreclosure lawsuit against Chen late last month over a $14.2 million loan tied to 10 properties largely in Chinatown, Bridgeport and the surrounding neighborhoods.
The lawsuit adds to a growing pile of debt lenders are going to court to recover from Chen’s large portfolio of rental properties. All told, Chen is facing more than $93 million in alleged defaults. The loans are tied to 55 properties with more than 230 rental units, according to court records. The Cook County Assessor’s office appraised the combined portfolio at just under $45 million, far below the amount owed.
Chen purchased the shuttered Cité restaurant space atop Lake Point Tower at 505 North Lake Shore Drive out of bankruptcy for $4.7 million in 2022. Despite reports at the time that Chen planned to open a new restaurant there, the establishment appears to still be closed.
The newest foreclosure lawsuit, filed April 23 in Cook County Circuit Court, hinges on a loan originated by Hollywood, Florida-based Encore SFR Finance in April 2024. Encore transferred the debt to the current noteholder, Michigan-based RRM RE Holdings, in January, records show. The lender alleges Chen stopped making monthly payments on the debt in August, and the loan is now accruing default interest at $3,062 every day. Based on the Aug. 29 default date, the accrued interest is likely more than $770,000.
The collateral includes nine properties in the South Side, including 243 West 24th Street and 1901 South Tom Parkway in Chinatown, as well as 3032 South Princeton Avenue and 3300 South Emerald Avenue in Bridgeport.
The tenth property covered by the mortgage is unit 1109 at Lake Point Tower, where Chen owns the top-floor restaurant space. Property records show an entity tied to Chen purchased the condo for $580,000 in 2022. It’s unclear if it was a personal home or a rental property.
Attorneys for RRM RE Holdings did not respond to a request for comment.
It’s at least the 10th lawsuit filed by a group of lenders and special servicers, including Situs, RRM RE Holdings and Treaty Oak Mortgage Trust to target Chen and a handful of his entities. Many of the loans originated with Encore SFR Finance and California-based Corevest.
In one lawsuit brought in November, which The Real Deal has not previously reported, a lender is suing Chen personally, accusing him of defaulting on a $14 million loan tied to seven properties. The lender said Chen now owes $14.4 million on the loan.
Chen has also been accused of mixing funds for at least five entities tied to his properties in violation of the loans, as well as allowing criminal activity to take place on his properties.
In a separate case brought earlier this year by RRM RE Holdings, Cook County Circuit Court Judge Lloyd Brooks appointed a receiver in March to take over management of the properties after Chen initially did not appear in court.
But Chen is trying to regain his footing in court. Attorney Gene Moskowitz, representing Chen’s entity in that case, asked the judge to reverse the decision May 1 so he can mount a legal defense. Moskowitz also appeared on behalf of Chen’s company in a separate lawsuit over a $14.4 million loan across six properties.
Chen and Moskowitz did not respond to requests for comment.
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Lake Point Tower penthouse owner Jiazhao Chen faces $25M foreclosure on Chinatown, Bridgeport portfolio
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