A Pennsylvania-based multifamily investor is poised to take over a downtown Chicago building from the developer that turned it from offices into apartments.
An LLC registered to the same address as Lindy Communities purchased the loan note backed by the 17-story mixed-use property at 330 S. Wells St. from an affiliate of lender Prime Finance in February, according to Cook County clerk's office records.
The property is now slated for a foreclosure auction next month after a judge ruled the note is in default and allowed Lindy's holding company to proceed with the sale process.
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In 2018, LG Development Group and Marc Realty began converting the 137K SF office building into 132 apartments with 24K SF of refurbished workspaces and first-floor retail, taking out a $27M construction loan from Regions Bank. It completed the conversion of the nearly 100-year-old property in 2019.
An affiliate of Prime Finance refinanced the construction debt in 2021 with a $28.2M mortgage, according to court documents. The loan matured in February 2025 and was declared in default after the borrowers failed to pay it off, according to court documents. Prime Finance filed a lawsuit in Cook County court against an affiliate of LG Development in May 2025.
Prime Finance's subsidiary sold the loan to Lindy's affiliate for $15M, a 47% discount, according to Cook County records.
Cook County Judge Jean Cocozza ruled in September that 330 S Wells Holdings LLC, the company registered to Lindy's Jenkintown, Pennsylvania, headquarters, could proceed with foreclosure after finding that multiple entities tied to LG Group defaulted on the mortgage. As of early September, the total amount due, including accrued interest, was about $33.3M.
Prime Finance, Lindy Communities and LG Group didn't respond to requests for comment.
The property appeared to fall on hard times as interest on its floating-rate debt, secured when rates were near zero, ballooned and rents couldn't catch up fast enough.
Debt service on the property of $2.4M outpaced net operating income of nearly $1.9M by the end of 2023, even though occupancy was at 97%, according to Morningstar data. Debt service was up almost $1M from the end of 2022 to the end of 2023.
Special servicer Situs Holdings began overseeing the loan in August 2024, according to Morningstar commentary. Servicer commentary from that month said the debt service coverage ratio fell below 1 due to an increase in debt service obligations with "stagnant rents."
If Lindy Communities acquires the property at the foreclosure auction, it can apply the outstanding balance on the loan as a credit toward the purchase price, according to court documents. The sheriff's auction is set for Nov. 3.
Lindy Communities owns about four dozen multifamily properties across the country, including four others in the Chicago area.
The office-to-residential conversion of 330 S. Wells St. predates the pandemic, kicking off years before former Mayor Lori Lightfoot unveiled plans to incentivize conversions of office properties along the LaSalle Street corridor. The project came before Chicago's conversion pipeline picked up — it is now the third-largest in the country, trailing only New York City and Washington, D.C.
Prime Finance made another major Chicago move earlier this year. The company, primarily a commercial real estate lender but an occasional buyer, entered a preliminary agreement in June to acquire the 31-story office building at 225 W. Wacker Drive from Spear Street Capital. The deal marked a discount of about 43% since Spear Street bought it for $210M in May 2020.
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