When Igor Gabal bought an office building in downtown Chicago for a 90 percent discount from its last appraisal, the $4 million price tag had one of two interpretations: either the deal was a sign that the property had become virtually worthless since the pandemic or Gabal had just made the best decision of his life.
The building, at 300 West Adams, is 12 stories and 240,000 square feet, with decorative terracotta detailing that shows off its era — the 1920s. But occupancy was only 50 percent, and any owner would have to pay the annual ground lease of about $1.4 million to start.
Fire sales are everywhere. In Houston, San Francisco, Manhattan, Washington, D.C., and Dallas, over 60 percent of office buildings traded in 2025 sold at a markdown from their prior sale price, according to analysis from Yardi Matrix.
But what a buyer does after the closing says more about the worth of a building than the headline number or percentage off. Adding value can mean doing updates, increasing tenancy or rebranding.
For Gabal, trouble began soon after headlines announced the deal in early 2024, and his investment in the building veered off course. He’s gone through legal trouble and sparred with partners. Meanwhile, the office market hasn’t really recovered, with potential tenants eyeing new or newly renovated Class A office buildings, not older stock.
He still has hope. This year, Gabal’s investment will either prove the naysayers wrong or serve as a cautionary tale for bargain buyers who’ve cashed in on what seemed like post-pandemic bargains.
“The value is definitely there,” he said. “I mean, it’s like we bought $100 for $1.”
Daunting competition
Since Gabal’s purchase, the broader office market has not performed well.
Out of the full inventory of downtown office space in Chicago, about 29.5 percent is available for rent. That percentage stayed nearly stagnant from 2024, when it came in at 29.4 percent, according to a 2025 year-end report from Savills.
One factor keeping vacancy high: new Class A. Just three blocks north of 300 West Adams, the shiny glass-paneled Bank of America tower at 110 North Wacker Drive looms over the Loop. Built in 2020 and 98 percent leased, the building is a glittering example of the high-risk, high-reward landscape of the current office market.
In November, lenders threw their confidence behind it, issuing a $700 million refinancing to its landlords, a joint venture of power players Oak Hill Advisors, Callahan Capital Partners and Affinius Capital. It was the largest commercial loan issued in Chicago in 2025, data analysis from The Real Deal found.
“It’s like we bought $100 for $1.”
Meanwhile, former meat-packing district Fulton Market in the West Loop is emerging as the go-to destination for office tenants. Sterling Bay recently listed a building the firm developed at 345 North Morgan with a $70 million construction loan. The 11-story building is a similar size as 300 West Adams but is 94 percent leased with an average lease term of 11 years.
If Sterling Bay manages to turn a profit on the sale, the deal will solidify Fulton Market’s dominance in Chicago’s office sector.
Gabal felt the tension. Directly south of Bank of America Tower and west of 345 North Morgan, he spent the two years leading up to that landmark $700 million refinancing languishing in Cook County Circuit Court with his redevelopment plans on hold.
Taxes, insurance & lawsuits
The auction for 300 West Adams had attracted buyers with less traditional real estate backgrounds, and some of the hopefuls were still circling, unhappy they hadn’t won. A few months after the sale closed in December 2023, a pair of local investors sued Gabal and JLL (on behalf of its brokers), claiming they were cut out of a deal to buy the building.
The plaintiffs, John Thomas and a little-known investor, Chris Hansen, alleged that they had planned to buy the building with Gabal but he had put in an offer on his own without their financial backing.
Had he gotten in on the deal, Thomas hoped to revive the office building along with his own reputation.
Thomas has led a tumultuous career involving two criminal convictions, one stint in federal prison and a role as a mole for the FBI during the investigation of Chicago political fixer Tony Rezko, an associate of disgraced former Illinois Governor Rod Blagojevich. He has said he built a $150 million real estate empire after his 2017 release from prison, but he filed for bankruptcy twice in 2022. He has since exited bankruptcy, public records show.
The lawsuit ultimately went in Gabal’s favor but not before the two traded barbs in the press.
“They have no wherewithal to execute and are just trying to disturb the normal people who are willing and have the capability to do this,” Gabal said of Thomas and Hansen at the time.
After seeing how things went at the property over the past two years, Thomas said he’s glad he didn’t get in on the deal.
“I have heart issues now. I actually do. But I think I would have had massive heart attacks if I had been this buyer,” he said.
Not long after the dust settled with Thomas and Hansen, Gabal was hit with another lawsuit, this time from his business partner, Ruben Espinoza. In a May filing, Espinoza accused Gabal of mishandling a $6.2 million insurance payout tied to water damage at the building.
In response, Gabal claimed Espinoza was the one mishandling funds set aside for the building’s operations.
Gabal alleges that Espinoza has withdrawn $1.5 million from the partners’ shared business account without Gabal’s permission and did not respond to repeated requests to stop.
“I have heart issues now. I actually do. But I think I would have had massive heart attacks if I had been this buyer.”
As a result, they were unable to pay property taxes on the building in 2023 and 2024, Gabal’s filing claims.
Meanwhile, Espinoza has been dealing with a barrage of lawsuits against him. Since 2022, he has been served with at least nine legal complaints from fellow investors, commercial tenants, lenders and even a state senator, at one point topping $80 million in disputes.
On top of facing foreclosures filed by lenders, two commercial tenants of Espinoza’s claim he took deposits and first month’s rent for spaces he had already filled with other tenants and refused to refund them.
Many of the legal disputes involving Espinoza are still pending.
Gabal claims he and Espinoza are close to settling their dispute and that he plans to buy Espinoza out of the ownership of the building.
“Obviously the lawsuits set me back,” he said. “But I managed to sit down with Espinoza and satisfy his requirements so I can pursue my vision and plan for the building.” Espinoza and his attorney did not respond to requests for comment.
Eking out a profit
Soon free to make decisions on his own, Gabal still has to figure out how to run the building.
Stabilizing a distressed building can generate impressive returns but buyers need to have a plan to stay afloat financially during the turnaround process, David Levy of Keen-Summit Capital Partners said. (Levy is also former president of the Midwest chapter of an organization called the Turnaround Management Association.)
“While real estate assets are more illiquid than a stock, the market is dynamic, it’s competitive, and it could take longer than anticipated to to lease up space,” he said.
At 300 West Adams, each month that Gabal goes without additional tenants or financing erodes the investor’s bottom line because of the ground lease owned to Hawaii-based investor Jay Shidler, who owns swaths of such ground leases throughout the U.S.
The terms of Shidler’s 99-year ground lease include a 3 percent increase each year until 2042, after which the annual payment plateaus to $2.5 million for the remainder of the lease, according to former loan data reports. The amount started at $1 million in 2012.
Gabal plans to convert the first two to three floors to a data center, due to the building’s proximity to a fiber route and the Centrio cooling station. With the right improvements, the remaining space can remain offices, he said.
Following a similar plan, a venture of heavy hitters Mike Reschke’s Prime Group and Quintin Primo’s Capri Investment Group sold the 385,000-square-foot former Cboe Global Markets headquarters at 400 South LaSalle Street for $40 million last fall. The sale came in at almost $104 per square foot — more than triple the $12 million, or $31 per square foot, that they paid for it a year earlier.
Prime and Capri bought the wide concrete-and-steel building in July 2024 with an eye toward data center redevelopment. Before selling, they completed early-phase work, including upgrades to power capacity — a desirable commodity nationwide.
The buyer, Arlington, Virginia-based Legacy Investing, plans to transform the six-story property into a 33-megawatt data center slated to go online by late 2026, according to co-founder and managing partner Daniel English.
But even doing the groundwork for such a project is expensive. The longer it takes to get started, the more operating costs a building owner incurs in the meantime.
“You don’t want to buy these things and then say, ‘Okay, now what?’ You want to have a clear plan going in,” Levy said.
Sale rack
Despite two years of struggle at 300 West Adams, Gabal is undeterred from a broader plan to increase his presence in the Loop.
The Ukranian-born investor got his start in Chicago real estate by investing in multifamily properties in the ’90s. But he sold off most of his buildings in 2012 in favor of building a business that specializes in importing European consumer goods ranging from high-end snacks and beverages to supplements and even painter’s tape.
After Covid, the call of real estate was too strong to resist. Gabal continues to look for deals in the Loop, though he feels there’s now more competition.
“We came at the lowest point in the market,” he said. “In the last 24 months … everybody came into the Loop and started buying.”
So far, it’s not clear if the market has reached the bottom. Other bargain hunters are still circling. In early 2025, Namdar, known for buying distressed malls, bought 70 West Madison for $85 million, a 77 percent discount from its last sale price of $375 million in 2014.
Gabal has also been pursuing a purchase of the distressed debt tied to the ground lease (also held by the Shidler Group) under The Burnham Center, the historic 22-story office building at 111 West Washington where he’s partnering with Reschke on the acquisition.
Like his plans at 300 West Adams, the deal has yet to finalize.