A big office complex near Chicago’s O’Hare International Airport has been handed back to its lender, continuing a trend amid historically low demand for corporate space but with a twist — this two-tower property is almost fully leased.

Alliance HP last month conveyed ownership of the leasehold interest in the Triangle Plaza complex to lender Varde Partners, according to Cook County property records.

It’s one of the most jarring examples of longtime owners giving up properties in the Chicago area, and throughout the country, as remote-work trends, rising interest rates, corporate layoffs, worries of a recession and other factors weigh down the office investment sector.

Triangle Plaza’s ownership change stands out because it is 92% leased to tenants including Komatsu, Old National Bank, Combined Insurance, Power Construction, Ardagh Metal Packaging and Lawson Products, according to a statement last month by Glenstar Properties announcing that the firm had taken over property and asset management on behalf of Minneapolis-based Varde Partners.

The property includes neighboring 14-story towers at 8750 and 8770 W. Bryn Mawr Ave., with about 627,000 square feet of space combined. Thousands of commuters and travelers pass by the property daily.

The property is in the northwest edge of the city, about 13 miles from the Loop business district. It is part of an O’Hare office market that includes clusters of towers along interstates 90 and 294 in Chicago and suburbs such as Rosemont, Illinois.

The Cook County deed is not specifically described as a deed in lieu of foreclosure, but that appears to be the case because no real estate transfer taxes were paid. A deed in lieu of foreclosure allows a lender to take back a financially distressed property without going through a formal foreclosure process.

Typically, properties handed back to their lenders have high vacancy, leaving them unable to make loan payments or finance build-out costs, broker commissions and other expenses of new leases.

It’s possible that falling rents, or the way the deal was structured in 2018, may have contributed to financial troubles.

Bryn Mawr, Pennsylvania-based Alliance HP walked away from the property almost five years after buying it for $141 million in September 2018.

The seller was one of Sam Zell’s real estate investment trusts, Equity Commonwealth. It was the last Chicago-area deal as part of the REIT’s selloff of nearly its entire portfolio. Chicago-based Zell died in May at age 81.

Alliance is affiliated with Honolulu-based Shidler Group, which is led by longtime real estate investor and First Industrial Realty Trust founder Jay Shidler. Shidler’s firms are known for buying office properties and then splitting them into separate investments: control of the office space itself and ownership of the land beneath the buildings.

Bifurcation of properties, which has been on the rise nationally, leaves the owner of the office space, also known as the leasehold interest, on the hook for ground-lease payments. Those added expenses leave the leasehold owner less room for error if rental income falls.

Triangle Plaza was among Chicago deals structured that way, with investors in the land borrowing $76 million from Wells Fargo in November 2018, according to county records. The ground lease is for 99 years.

An Alliance affiliate continues to own the land.

Other ground-lease deals structured by Shidler ventures were the historic Burnham Center and 300 W. Adams St. office towers in the Loop.

Those three leasehold owners have fallen into financial distress. The Burnham Center’s current leasehold owners, Golub & Co. and The Family Office, recently put the tower on the market for sale in a deal expected to fall short of the value of the remaining debt.

Varde provided a $77.7 million loan to back Alliance’s purchase nearly five years ago.

“We are committed to bringing this iconic property in Chicago’s best-performing suburban office market to its next phase, maintaining Triangle Plaza as the high-value, premier space it is,” said Michael Klein, co-founder and managing principal of Glenstar. “Our team excelled in the property management and oversight of capital improvements at the adjacent President’s Plaza in the O’Hare market, and we will apply our deep office sector knowledge and tenant-focused approach to managing Triangle Plaza as well.”

It’s unclear whether Varde will own Triangle Plaza long-term or if the firm will look to sell it.

Shidler and Alliance executives did not respond to requests for comment from CoStar News. Varde declined to comment.

Triangle Plaza last month signed the Society of Actuaries to a 17,000-square-foot lease, according to the Glenstar statement.

We look forward to continuing this success with a property management firm like Glenstar that has a proven track record of success in this market, and a new, well-capitalized owner in Varde,” the property’s leasing broker, Newmark’s John Norris, said in the statement.

Varde assumes ownership amid waves of local and national office properties falling into foreclosure, being handed back to lenders or otherwise in distress.

Not far away in suburban Rosemont, Canadian investor Adventus Realty Trust recently was hit with a foreclosure suit after allegedly defaulting on its nearly $115 million mortgage on the Riverway complex, The Real Deal Chicago first reported.

Glenstar is among investors that have handed back Loop properties to their lenders, recently surrendering the historic Chicago Board of Trade Building. A huge building next door, 175 W. Jackson Blvd., is up for sale as owner Brookfield Properties faces foreclosure.

Some lenders are trying to offset losses on office loans by offering good loan terms to the buyer. One example of seller financing is the Oak Brook 22 complex that this month went on the market in Chicago’s western suburbs.