More Bad News For 550 West Jackson
The 601W Cos.' troubles with 550 West Jackson appear to be growing. The 405K SF office tower was recently appraised at $68.1M, according to Commercial Real Estate Direct. That is a value far less than the mortgage on the property and less than 45% of its appraised value a decade ago.
The 601W Cos. acquired 550 West Jackson for $125M in 2005 and refinanced the mortgage two years later as part of a CMBS offering that appraised the property at $139M. The remaining balance — $97.5M — was turned over to a special servicer in March. There have been reports that one of the building's largest tenants, SG Americas Securities, will exercise an early termination option in its lease and leave well before the lease expires in August 2019. Two other tenants have leases expiring within the next eight months. If all three tenants seek a new home, 550 West Jackson's occupancy rate would plunge from 88.5% to 40%.
550 West Jackson's loan-to-value ratio at the time of refinancing was just over 70%. The 601W Cos. is current on the loan payments, but that could change. The loan is due to mature in September.
