The retail shops on the ground floor of the Palmer House Hilton will be auctioned off to the highest bidder next month after owner Thor Equities defaulted on a $62M loan against the space.
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Wilmington Trust hit New York-based lender Thor with a foreclosure lawsuit on behalf of a lender to the property in 2021, The Real Deal reports. The lawsuit claimed Thor hadn’t made payments since May 2020 on its mortgage for 60K SF of retail space and a parking garage, located at East Monroe and South State streets.
Now the property is set to hit the auction block Sept. 6.
Thor also held the 1,635-room Palmer House hotel property under a separate arm of its company, and that asset has also been embroiled in controversy. The city filed a foreclosure lawsuit on the property last year after Thor defaulted on its $333.2M mortgage, TRD reports.
A judge entered a $427.8M foreclosure judgment against Thor’s hotel management entity last year, per TRD, though the lender has yet to put that portion of the property on the market.
The sale of the Palmer House retail space comes as retail in the Loop has struggled with vacancy in the wake of the pandemic. Retail vacancy in the area sat at 14.9% in 2019, per an analysis from Stone Real Estate. But three years later, retail vacancy in the Loop hit a new high in 2022, increasing from 27.4% in 2021 to 28.3% at the end of last year, according to the analysis.
In the Central Loop — where the Palmer House shops are located — the vacancy rate went from 23.4% to 25%. Stone diagnosed one of the main issues impacting the State Street shopping area as the perception of chronic vacancy.
The opening bid for the retail properties has not yet been set, per the Cook County Sheriff's Office, which holds regular property auctions.
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