A Loop office building is headed to the auction block, roughly a year after former owner Marc Realty was hit with a foreclosure lawsuit.
The vintage 10-story office building at 216 West Jackson Boulevard will be up for grabs starting Feb. 20, with an opening bid of $1 million, Crain’s reported. Farbman Group brokers Bill Bubniak and Todd Szymczak are marketing the property, and Ten-X will handle the auction.
The opening bid equates to a little over $5 per square foot.
Marc bought the 185,000-square-foot building in 2013 for over $22 million, about $120 per square foot. The firm was sued after allegedly defaulting on a $16.5 million loan tied to the property. Marc eventually surrendered the property via deed-in-lieu of foreclosure, leading Florida-based special servicer LNR Partners to take control of the site last summer.
LNR Partners, a division of Miami Beach-based Starwood Property Trust, is looking to sell the 125-year-old building, and the auction will test investor interest in a mostly vacant property during challenging times for downtown office landlords.
Remote work trends have contributed to record-setting office vacancies in 11 of the last 13 quarters, and the issue has been exacerbated by higher interest rates and tough lending standards.
Years of poor performance in the office sector has caused property values to plummet. The 20-story building at 300 West Adams Street, for instance, recently sold for $4 million, or $17 per square foot. That’s nearly 90 percent less than its appraised value in 2012.
Marc listed the Jackson Street building for sale in 2020, expecting bids close to $27 million. But it never traded, and its occupancy declined amid a sluggish downtown office market. The building, just over 14 percent leased, is framed by Farbman Group as an opportunity for a buyer to reposition it into a competitive Class B office space
The property was appraised at $3.4 million in September, the outlet reported, citing data from CoStar Group. Farbman is also playing up the building’s proximity to Willis Tower, which recently underwent a significant renovation that included adding retail space on the lower floors, generating foot traffic.
—Quinn Donoghue
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