Thor Equities is writing a new chapter in its tumultuous saga with the iconic Palmer House Hilton hotel property.
The company reacquired the 68K SF retail portion of the property at 17 E. Monroe St. in the Loop for $5.1M, Thor stated in a release Friday. Special servicer LNR Partners took control of it in 2023 from Thor through a sheriff’s sale, with a high bid of $29.5M. The sale followed a $62M foreclosure suit filed against Thor in December 2020 after the company stopped making payments on its retail mortgage.
The retail portion is about 35% occupied, and Thor plans to focus on leasing and repositioning the property to attract a stronger mix of tenants and boost the overall retail offering.
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“We know this asset well and believe there is a compelling opportunity to unlock significant value through strategic leasing and repositioning,” Thor Equities CEO Joe Sitt said in a statement. “We are excited to once again take control of the retail component and realize its potential.”
Friedman Real Estate prepared the online auction in early August for the retail property on LNR's behalf. LNR did not disclose the reason for the auction or its target price, per Crain’s Chicago Business.
Thor will have its work cut out for it to successfully lease up the property’s retail space. The vacancy rate is significantly higher than the broader vacancy rate in the Loop, which was at about 28.5% in 2025, according to Stone Real Estate.
“During my last walk-through there in June, it was almost completely vacant,” David Putro, associate managing director at Morningstar, said in an email. “The pure retail space was practically barren.”
The Palmer House’s ownership structure is complex. After Thor acquired the property in 2005, it subdivided it into three separate parcels: a hotel component; a retail, office and parking portion; and an annex component that houses mechanical and utility infrastructure.
The subdivision is at the heart of an ongoing legal fight between bondholders, Thor and the company’s lender, JPMorgan Chase. Bondholders sued JPMorgan in New York federal court in 2024, arguing that the bank failed to disclose key information about the parcel split to investors, which complicated efforts to take over the hotel amid a default in 2020.
The lawsuit claims that JPMorgan knew about the hotel’s subdivision but didn’t tell investors when it packaged the Palmer House into a CMBS loan in 2018 and sold it to dozens of them.
The same bondholders previously filed a separate foreclosure lawsuit against Thor in Cook County in 2020. A judge issued a judgment of foreclosure against Thor Equities in 2022 for defaulting on its $333.2M mortgage, but the hotel has yet to sell amid a separate, ongoing third lawsuit over a licensing agreement within the property.
The loan was declared “non-recoverable” in January, and its servicer stopped advancing interest payments, according to Morningstar commentary.
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