Receiver Scores HQ Lease at Distressed Suburban Office Building

An electronic component maker just turned heads by signing a lease at a distressed suburban office complex, at a time when office users are running from properties that are in financial trouble.

Littlefuse will occupy 53,000 square feet in the Riverway complex, at 6133 North River Road in Rosemont, with plans to relocate its headquarters from a nearby building, at 8755 West Higgins Road, at the end of the year, when its 54,800-square-foot lease expires, Crain’s reported.

A venture of Canada-based Adventus Realty Trust, was hit with a $115 million foreclosure lawsuit last summer, after defaulting on a $128 million CMBS loan it took out on the complex in 2016.

Dallas-based real estate firm Trigild has served as the property’s court-appointed receiver since September, while Florida-based special servicer LNR Partners oversees the CMBS loan on behalf of bondholders.

Littlefuse’s decision stands out because most tenants avoid distressed properties due to risks, such as inadequate maintenance or incomplete renovations. Plus, lenders that seize properties often try to sell them off, as opposed to investing in upgrades or attracting new tenants.

However, Littelfuse was reassured by LNR and Trigild’s long-term financial commitment. Despite the foreclosure, new management has continued a multimillion-dollar improvement plan initiated by Adventus. This project includes upgrades to the building’s conferencing center, auditorium and outdoor spaces.

Luminare Health and Culligan have recently signed or renewed leases in the building, and they’ve received tenant improvement allowances for office build outs, enhancing confidence in the property’s viability.

“Most [lenders] are just keeping the asset alive and the lights on, but [LNR] is doing active investment, and they’ve shown a commitment,” said Cresa managing principal Ed Lowenbaum, who negotiated the lease on behalf of Littelfuse.

—Quinn Donoghue