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One of the largest suburban office campuses is officially a distressed property, and a sizable chunk of its outstanding debt was recently transferred to a servicer. AT&T's former 1.6M SF Hoffman Estates campus carries $115.8M in debt.
The troubles began when AT&T vacated the property, now known as Lakewood Center, in 2013 and spread its 3,000 employees across other Chicago-area offices. Although the telecommunications giant has paid rent on the property since, its lease expires next month. The landlord, Highlands REIT, has not found new tenants and fears it may not be able to make mortgage payments on a loan that matures in 2035, according to Crain's.
The debt on the property was split 10 years ago and sold as part of two CMBS offerings. A $56.7M portion was recently placed with C-III Asset Management and the remainder is expected to be placed shortly. This is not good news for Highlands, as Lakewood Center accounts for 27% of its annualized rent. [Crain's]
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