Feil Organization scored a lease expansion with a specialty insurer — a rare move for downtown office tenants amid the pandemic — at the landlord’s LaSalle Street tower, providing some relief to the struggling Central Loop office market.
Charlotte-based Amwins added about 22,000 square feet and six years to its lease in the 37-story building at 10 South LaSalle Street, Crain’s reported. With the deal, Amwins now occupies over 78,000 square feet at the property and is under contract through 2033. CBRE represented the tenant, and Stream Realty Partners represented Feil.
Feil likely breathed a sigh of relief upon the lease signing. One of the site’s largest tenants, Northern Trust, ditched 10 South LaSalle in 2021, leaving behind 100,000 square feet of the building’s 781,000.
The building, which was 73 percent leased before the Amwin deal, hadn’t been generating enough income for Fiel to adequately pay back its $105 million loan on the property. As a result, the loan was recently transferred to a special servicer — a sign the property’s owner could default on the debt or need to restructure its terms.
Feil is far from the only downtown office owner in the same position. In recent weeks, debt servicers have noted the respective struggles of landlords 601W and a joint venture of investors David Werner and Joseph Mizrachi to refinance big debt packages tied to the Aon Center and a West Loop office tower.
Landlords along LaSalle are in similar situations. On the same block as Feil’s building, an $84.5 million loan tied to the 47-story office building at 1 North LaSalle was also transferred to special servicing recently.
“We worked diligently to accommodate our esteemed tenant, Amwins,” Feil’s Brian Feil said in a statement, adding that the deal is “a testament to the continued robust demand at 10 South LaSalle Street.”
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The lease also provides some hope for owners of older office buildings, such as 10 South LaSalle, built in 1989. Many companies considering commercial real estate moves have relocated to newer office towers, as new amenities in trendy locations such as Fulton Market offer a greater chance to reel employees away from their remote-work desks and back into the office.
Meanwhile, landlords up and down LaSalle Street have been beleaguered, a narrative countered by the Amwins expansion. The city’s traditional financial corridor has been in ruins since the pandemic, with its commercial property vacancy rates soaring to unseen levels.
— Quinn Donoghue