Treasury par yields, Aug. 3 close (U.S. Treasury). SOFR, Aug. 3 (New York Fed).
This week: The Palmer House Hilton's retail base is back on the block with a $1.9M starting bid, after a $62M loan and a $29.5M sheriff's sale; four CMBS trusts booked $175.87M of losses on Bank of America Plaza; and the $49.33M loan on an upstate New York mall moved to special servicing.
Palmer House retail: a $62M loan, now a $1.9M starting bid
The Palmer House retail went for $29.5M in 2023. The auction now opens at $1.9M.
17 E. Monroe St., Chicago · Retail & parking
- Owner
- LNR Partners (lender-owned since 2023)
- Former owner
- Thor Equities
- Size
- ~67,438 sf retail, office & parking
- Occupancy
- 37% as of July 1
- Foreclosure
- Cook County · filed 2021 by Wilmington Trust, trustee
- Hotel above
- $427.8M foreclosure judgment · no sale set
What happened. LNR Partners scheduled an online auction to begin Aug. 3 for the retail, office and parking base of the Palmer House Hilton, with a $1.9M starting bid. LNR took the property at a Cook County sheriff's sale in 2023. The auction covers only the commercial base, not the 1,639-room hotel tower above it.
The numbers. Thor Equities stopped paying the $62M mortgage in May 2020. Wilmington Trust, as trustee, sued to foreclose in 2021, and LNR won the September 2023 sheriff's sale with a $29.5M bid. The $1.9M opening bid is about 6% of that bid and about 3% of the original loan.
The squeeze. Nearly three years of lender ownership haven't filled the space. Occupancy was 37% on July 1, and Lids and Crocs are among the tenants still there. Loop retail vacancy peaked at 30.13% in 2023 and was still 28.5% in 2025. The reserve is unconfirmed.
What's next. The hotel above is still tied up in court. Thor's hotel entity faces a $427.8M foreclosure judgment, and in August 2024 bondholders sued JPMorgan, alleging it failed to disclose that the property had been split into separate parcels. As of July, no sheriff's sale had been set for the hotel. Whoever wins this auction gets a base that sits under a hotel still in foreclosure.
Five situations to track
- REOFourth & BlanchardSeattle, WA · Office
About $29M (~$70 a foot) is the expected price for the 51%-occupied tower; the seven-building loan it was part of was $233.13M.
- ForeclosureHyatt Place / La Quinta O'HareRosemont, IL · Hotel
The lender claims about $23M is still owed on a $25M construction loan that matured in 2022. It filed to foreclose in July and asked for a receiver.
- Special servicingSangertown SquareNew Hartford, NY · Regional mall
The $49.33M loan moved to special servicing July 27.
Since thenSept. 15: Wells Fargo Bank filed a foreclosure suit claiming at least $53.37M unpaid. - DefaultInterlace, Palace & Chaparral ApartmentsDallas-Fort Worth, TX · Multifamily
$70.3M of loans on three apartment properties faced June 2 auctions. Nitya said it paid $1M to defer them, with monthly extensions up to $5M total.
Since thenAug. 10: Nitya Capital's announcement of a Morgan Stanley refinance for The Interlace was reported; The Palace and Chaparral, with $38.9M of loans, still faced foreclosure. - ResolvedBank of America PlazaLos Angeles, CA · Office
$175.87M of losses across four CMBS trusts after the $210M receivership sale, a 44% loss on the $400M loan.
San Francisco. Seven Equity Group bought the former WeWork office at 25 Taylor St. out of receivership for $6.75M. About $16.93M was outstanding on the CMBS loan.
Plano, TX. S2 Capital sold the 229-unit Hathaway at Willow Bend to Granite Towers Equity Group before a foreclosure auction could take place. The price was not disclosed.
- End of summer
- Harborplace: Cuples Tea House and Vinyl Pages set to close
- By year-end
- Harborplace: owner has said demolition of the pavilions could begin
— The DistressedAsset.com editorial team
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