A Fulton Market landlord is facing foreclosure after buyers backed out of a pair of deals on a portfolio of buildings that are prime to be assembled into a redevelopment project.
The landlord, a venture of Lake Geneva-based investor Thomas P. Owens and his family, is now seeking a quick sale via sealed-bid auction, with bids due Feb. 24 to Northbrook-based brokerage AW Properties Global, according to a listing and public records.
While the listing puts $11 million as a starting point, the borrowers fell into default on a $4.4 million loan from Northbrook Bank & Trust in 2023, a Cook County lawsuit shows. Northbrook initiated the suit in the fall of 2024 but has since sold off its interest in the loan note to an obscure Delaware LLC that has advanced the case.
In March 2024, an appraiser pegged the portfolio’s value at just under $17 million, said Diana Peterson, CEO of AW. Her firm publicly listed it on Friday.
Marketing materials for the contiguous parcels — at 1044-48 West Kinzie, 410 North Carpenter, 415 North Aberdeen and a parking lot at 412-18 North Carpenter streets — touts that land totals nearly an acre, and that the more than 53,000 square feet of combined buildings on the parcels are 43 percent occupied, with a couple leases ending this year, while three others end in 2027, 2028 and 2029.
But there’s likely far more value in the land’s potential to be consolidated into a single redevelopment pursuit, possibly by knocking down the existing structures. Other potential buyers with redevelopment in mind have previously made offers on the property, according to Peterson, who is representing the Owens venture and said that the lender is willing to let the sale process play out before resuming its foreclosure lawsuit.
Previous offers for the portfolio have been considered in the $18 million to $22 million range, before interest rate hikes cut into property values and bogged down the development financing pipeline, Peterson said. But those buyers backed out, while the properties were previously listed under another brokerage, but she declined to identify the parties involved.
Peterson believes the market is thawing and the deal will move smoothly this time around.
“We’ve seen a huge shift in just the last few months from cash sitting on the sidelines to jumping back in,” she said, noting AW specializes in drawing cash buyers as it also has an auction platform.
Matthew Tarshis, a court-appointed receiver of the portfolio who began overseeing its operation during the foreclosure case, didn’t return requests to comment. Attempts to contact Owens were unsuccessful and an attorney representing his borrowing entity did not return a request for comment. An attorney for the lender also didn’t return a request for comment.
While a sale at $11 million — the sealed-bid auction’s starting point — would mark a price of just $274 per square foot of land and extend a downward shift for Fulton Market development site prices, a deal at $17 million, the appraisal given to the bank last year, would be closer to $424. This price is around the same as what Sulo Development recently paid to Sterling Bay in a $30 million deal for 1325 West Fulton Street, where 243 condos are planned. The Sulo deal marked a drop from pre-pandemic Fulton Market land prices of $500 to $600 per square foot of land.
But the portfolio now up for sale via the quick-turn auction also faces a couple challenges, according to prominent Fulton Market developers who asked to remain anonymous. It doesn’t include a key condo building on the western corner of the block, at 401 North Aberdeen Street, and there’s an alleyway between the buildings that face Kinzie Street and the one at 415 North Aberdeen.
Peterson, however, dismissed concerns about the portfolio excluding the condo building. Fulton Market insiders have also suggested it could be possible to gain control of the alleyway for redevelopment.
Marketing materials state that a deal would close in March, after bids are received and reviewed.
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