The 601W Cos. owns two of Chicago's most notable trophy properties including Aon Center and Prudential Plaza, and its planned redevelopment of the Old Main Post Office is one of downtown's most ambitious adaptive reuse projects. But another 601W-owned building faces an uncertain future. The 601W Cos.' $97.5M mortgage on 550 West Jackson Blvd. was turned over to a special servicer, according to Crain's Chicago Business, reflecting concerns the firm will be unable to pay off the mortgage when it comes due in September.

The 601W Cos. acquired the 405K SF building for $125M in 2005, and refinanced it with the existing loan two years later as part of a CMBS offering. The building's occupancy rate is relatively strong at 89% and 601W is making its monthly payments on the loan, but Morningstar valued 550 West Jackson at $121M, giving it a LTV ratio of 81%. That is another reminder of the lax CMBS landscape pre-2008.

While 550 West Jackson is not overleveraged, refinancing the loan in a manner that will encourage long-term value in the asset may be hard to come by. Compounding matters, the building has a couple of key tenants with leases set to expire the next two years. If 601W cannot replace tenants or re-up the existing ones, that becomes an added risk that lenders may not want to take.