An office tower along Chicago's iconic shopping strip is heading to a foreclosure auction at the end of next month after its owners defaulted on a nearly $51M loan.
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A joint venture of Golub & Co. and a subsidiary of BlueFive Capital acquired the office portion of 625 N. Michigan Ave. for $72.4M in 2019 with a loan from Cantor Commercial Real Estate Lending.
Citibank, operating as a trustee for CMBS bondholders, filed a foreclosure lawsuit in May against the joint venture after it failed to pay off the loan at its March maturity date. A judge ruled in October that the note is in default, and the property is scheduled for a sheriff's auction on Dec. 28.
Golub and BlueFive Capital did not immediately respond to requests for comment.
The property was transferred to special servicer LNR Partners last November for imminent default. The borrowers indicated they could not "continue to come out of pocket to cover operating expenses," according to servicer commentary.
As of the beginning of September, the outstanding amount due under the loan agreement was about $47.6M, according to court documents.
The 27-story property's occupancy rate sat just below 58% as of March, according to loan servicer commentary. That's well below the 92% occupancy when the loan was underwritten in 2019, according to Morningstar data.
The office block of the building, floors five through 27, is about 290K SF, according to Morningstar data.
A judge appointed Friedman Real Estate Management's Scott Shefman as receiver for the property in June, according to The Real Deal.
According to servicer commentary from the beginning of October, Shefman is finalizing the takeover of the property, and its leasing agent is working on two renewals.
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