The lawsuit is one of many that have plagued office landlords since the COVID-19 pandemic began. This has accelerated the rise of remote work and dampened demand for offices, especially in the old Loop office building. Space shedding has led to record vacancy rates for downtown offices. Revenue is declining for many office building owners. Rising interest rates this year have made it more difficult for landlords to sell or refinance their mortgages, and many owners in the loop have faced foreclosure lawsuits or been forced to surrender their properties to lenders.
Financial difficulties are severe along and near LaSalle Street, and Mayor Lori Lightfoot’s administration now wants investors to buy outdated office buildings at deep discounts. Convert them for residential use. City planners expect such redevelopment to bring much-needed traffic and vitality to the heart of the central business district.
The 129-year-old building at 19 S. LaSalle could be one such candidate for conversion. The Espinoza venture bought for $22 million in 2019 when the building was 61% leased and took out a $19 million mortgage to stabilize the building with new tenants at the time, according to CMBS loans. According to a related Bloomberg report.
But the pandemic seems to have turned that plan upside down. The building’s occupancy rate fell to 56% last year, and net operating income was just below his $147,000, according to Bloomberg lending data. That’s just a fraction of the $1.1 million debt service Espinoza paid in 2021, according to Bloomberg lending data.
a report Special servicer KeyBank’s Espinoza Ventures, which oversees loans on behalf of investors, said it was “pursuing potential redevelopment options” ahead of the July 10 maturity of the mortgage. But Espinoza “was not efficient in communicating and did not provide relevant avenues of resolution,” prompting a foreclosure claim filed in September, the loan report said.
Neither Espinoza nor KeyBank responded to requests for comment.
Designed by William LeBaron Jenny, the building was originally known as the Central YMCA Association Building when it opened in 1893. The building’s largest tenant today is the law firm of Jeffrey Leving, which has a 15,642-square-foot lease that expires in July 2023. Bloomberg data shows.
The building was rated “Orange” by the Chicago Historical Resources Survey, a city report completed in 1995 to analyze the historical and architectural significance of all buildings in the city built before 1940. It is rated as architectural features or historical relevance that made them potentially important in the context of the surrounding community,” according to research. You are more likely to receive tax credits or other public subsidies allocated to your historic property. Other historic and damaged properties nearby include the former Bank of America Offices at 135 S. LaSalle St., much of the office tower at 105 W. Adams St., and above the JW Marriott Chicago Hotel at 208 S. LaSalle. There is an office block of st.
19 S. LaSalle has potential incentives through the city’s new “LaSalle Reimagined” initiative. The initiative dangles the sweetener of tax-raised loans and other public subsidies as the developer converts his old LaSalle office building into affordable unit apartments.
The property at 19 S. LaSalle is separated from the building at 29 S. LaSalle St. by a pedestrian street. This building is the only former office building in the hallway that has been converted to apartments. The building, now called La Salle’s Millennium, contains 216 units and debuted last year.