Troubled Chicago Office Building Takes 62% Haircut In Latest Appraisal

AMA Plaza received an updated appraisal that slashed its valuation by 62% to $208.5M, a sharp decline from the property's valuation of about $550M at loan issuance just four years ago.

The 1.2M SF Chicago office tower at 330 N. Wabash Ave. moved to special servicing last August after borrower Beacon Capital Partners indicated it might not be able to make its payments. The loan had an initial maturity date of June 2023, with three one-year extension options available.

The loan was ultimately extended last summer with the borrower paying $5.9M for an extension of the interest rate cap, pushing maturity to June 2025, according to Morningstar Credit.

Occupancy was about 84% as of June 2024, down from 96% leased when Beacon acquired it in 2016, according to CoStar data.

While there is no significant near-term rollover, large tenant improvement obligations tied to a lease extension of the building's largest tenant, the American Medical Association, could be contributing to the property's cash flow problems, the alert indicated.

Beacon did not immediately respond to a request for comment.

Beacon scooped up AMA Plaza for $470M in 2016 and refinanced it with the $370M floating-rate loan in 2021.

In November, Beacon was hit with a foreclosure lawsuit alleging that it owes $372M to the bondholders in the loan to avoid a foreclosure sale of the building, The Real Deal reported. 

“We believe the foreclosure action filed against AMA Plaza is premature and inappropriate,” a spokesperson for Beacon told the outlet at the time. “We have remained in active discussions with the lender regarding a restructuring of the loan.”