In a bid to sidestep a lengthy foreclosure process, a court-appointed receiver for the 22-story 175 West Jackson Blvd. has chosen JLL to market the property, according to Crain’s Chicago Business.
This move comes in the wake of former owner Brookfield Asset Management relinquishing ownership of the 1.4 million-square-foot building to its lender following a default on a hefty $258 million loan.
Downtown Chicago has been grappling with the repercussions of remote work, surging interest rates and a record-high vacancy of 22.6% in the second quarter, as reported by CBRE, leading to a wave of buildings facing foreclosure, including the Civic Opera building; 401 South State St., whose owners are being sued by Deutsche Bank for defaulting on a $47.8 million loan; and 30 North LaSalle St.
Brookfield acquired 175 West Jackson, formerly known as the Insurance Exchange Building, in 2018 for $305 million, but despite its illustrious history and prestigious tenants, occupancy rates have been a challenge. As of 2021, the occupancy stood at 65% and has since declined further to 59%, well below the average of 77% for downtown office buildings.
In March 2022, the building was appraised at $210 million, but its value has since plummeted to $170 million, said Crain’s.
JLL’s marketing strategy will center on the opportunity for potential buyers to assume Brookfield’s loan, which carries a fixed rate of 5.1%. In the current climate of soaring interest rates, this fixed-rate loan could prove to be a major draw for investors looking to avoid the impact of today’s rates.
