The CMBS maturity wall still serves as a stark reminder of the freewheeling pre-2008 commercial real estate market, and the Chicago market is not out of the woods. The top seven CMBS foreclosures in the market this cycle account for over $269M in delinquent loans, according to research from Trepp. Following are those loans, what precipitated their fall into foreclosure and how the assets are faring now.
7. 850-950 Warrenville Road
Location: 850-950 Warrenville Road, Lisle
Property Type: Office
Loan Amount: $9.2M
Loan Origination Date: May 5, 2006
Loan Maturity Date: June 1, 2016
Special Transfer Servicer Date: June 8, 2016
Foreclosure Start Date: Dec. 8, 2016
The first warning signs that this asset was in trouble came in 2012 when National Louis University, faced with declining enrollment, put 86K SF of its offices up for sublease.
6. 3M Warehouse
Location: 2600 Wirsing Parkway, DeKalb
Property Type: Industrial
Loan Amount: $10.3M
Loan Origination Date: Sept. 15, 2006
Loan Maturity Date: Oct. 5, 2016
Special Transfer Servicer Date: Aug. 26, 2016
Foreclosure Start Date: Dec. 19, 2016
I-88 is one of Chicago's best-performing industrial markets for assets close to the city limits, but DeKalb is a fair drive away from Chicago. Colliers, which is marketing the warehouse for buyers, reduced the asking price by $500K.
CORRECTION, May 18, 2017, 8:15 A.M. CT: An earlier version of the story incorrectly referenced the owner and borrower of the 3M warehouse in DeKalb that is subject to foreclosure.
5. Discovery Office Plaza
Location: 920, 1002 and 1014 East Algonquin Road, Schaumburg
Property Type: Office
Loan Amount: $10.4B
Loan Origination Date: March 28, 2007
Loan Maturity Date: April 11, 2017
Special Transfer Servicer Date: Feb. 15, 2012
Foreclosure Start Date: Jan. 11, 2014
American Landmark Properties president Al Gluck hit paydirt in the city with the 2015 sale of Willis Tower, but he has been trudging along in the burbs. In addition to this asset, properties Gluck owns in Bensenville and Hoffman Estates were also hit with foreclosure suits. Discovery Center was appraised at only $2.2M in 2013.
4. 3M Fairview, DeKalb
Location: 1211 Fariview Drive, DeKalb
Property Type: Industrial
Loan Amount: $14.5M
Loan Origination Date: Sept. 11, 2007
Loan Maturity Date: Oct. 5, 2017
Special Transfer Servicer Date: Aug. 29, 2016
Foreclosure Start Date: NA
CORRECTION, May 18, 2017 8:15 A.M. CT: A previous version of this story incorrectly listed the owners of this property. The story has been updated.
3. Northland Plaza Shopping Center
Location: Sycamore and Barber Greene roads, DeKalb
Property Type: Retail
Loan Amount: $30.2M
Loan Origination Date: June 8, 2006
Loan Maturity Date: June 11, 2016
Special Transfer Servicer Date: Jan. 18, 2016
Foreclosure Start Date: May 31, 2016
This 307K SF retail center has seen some turbulence in recent years. A JC Penney store here was one of 40 the department store chain closed in 2015.
2. Algonquin Commons Shopping Center
Location: 1520 Randall Road, Algonquin
Property Type: Retail
Loan Amount: $80.7M
Loan Origination Date: Oct. 29, 2004
Loan Maturity Date: Nov. 1, 2014
Special Transfer Servicer Date: June 20, 2012
Foreclosure Start Date: Dec. 26, 2012
The Algonquin Commons loan, split into two parts, accounted for 36% of its pool's expect losses when Fitch Ratings affirmed it last May. But the offering has been performing better than expected, and the mall recently underwent new construction last summer.
1. Lakewood Center Chicago
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Location: 2000 West SBC Center Drive, Hoffman Estates
Property Type: Office
Loan Amount: $113.7M
Loan Origination Date: Nov. 15, 2005
Loan Maturity Date: Dec. 1, 2010
Special Transfer Servicer Date: June 24, 2016
Foreclosure Start Date: Aug. 19, 2016
US Bank filed a $132M foreclosure lawsuit on this asset last September. The sheer size of the campus could prove problematic for investors, but it is possible the 1.6M SF campus could see renewed life as an anchor for a healthcare center or a data center, in the right hands.
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