BREAKING NEWS: Kohan Retail Investment Group has just secured a significant foothold in Chicago’s distressed real estate market by acquiring a troubled mortgage worth $60 million tied to the 33 West Monroe Street office tower. This acquisition underscores the drastic decline in property values in the Loop, where buildings and loans are being exchanged at steep discounts compared to pre-pandemic figures.
The 28-story, approximately 900,000-square-foot tower is currently only 44 percent leased, making this deal particularly noteworthy. Kohan’s purchase comes after Principal Life Insurance sold the mortgage for a staggering $25 million, highlighting a significant drop in property values and indicating a troubling trend for owners in the area.
By acquiring this loan, Kohan positions itself to potentially take control of the building if the current owner, AmTrust RE, defaults on its obligations. This move is part of a broader strategy by Kohan to acquire both distressed loans and properties, as reported by The Real Deal.
Kohan’s recent activities reflect its aggressive approach to capitalizing on the downtown market’s downturn. Earlier this year, the firm made headlines by purchasing the iconic 65-story tower at 311 South Wacker Drive for approximately $45 million, showcasing its willingness to acquire marquee assets at steep markdowns.
AmTrust RE is currently facing considerable challenges as the landlord has recently lost 30 North LaSalle to a lender takeover and is confronting a foreclosure lawsuit related to a $260 million mortgage on the Illinois Center. The financial and legal pressures surrounding AmTrust have left many of its properties, including those in the Loop, vulnerable to creditor actions and opportunistic bids, as documented by The Real Deal.
Investors like Kohan are drawn to acquiring distressed loans for several reasons, including negotiating a workout, foreclosing, or converting office spaces into alternative uses. Kohan’s interest in potentially converting part of 311 South Wacker into a hotel illustrates the innovative strategies buyers might consider when they take control of such investments.
This latest acquisition by Kohan signals a pivotal moment for the Loop area, where property values are fluctuating significantly. As the market continues to evolve, stakeholders and investors alike will be closely monitoring the developments surrounding AmTrust RE and Kohan’s strategic maneuvers.
The real estate landscape in Chicago is shifting rapidly, and the impacts of these transactions will resonate throughout the city. Watch for further updates as this story develops.
