The owner of a 52-story office tower along the Chicago River that was designed by Ludwig Mies van der Rohe and completed after the architect’s death is in danger of defaulting on its $370 million loan.
Beacon Capital Partners’ commercial mortgage-backed securities loan on AMA Plaza has moved to special servicing, a step that can precede a default, according to loan reports.
The nearly 1.2 million-square-foot skyscraper at 330 N. Wabash Ave. is the latest office building in Chicago and other cities throughout the country to face a tenuous financial future because of sluggish demand, rising interest rates, falling property values and other factors.
In this case, loan trouble affects one of the tallest and last buildings ever designed by Mies van der Rohe, the German-born and Chicago-based architect who was known for designs that followed his “less is more” mantra.
Beacon’s potential loan default, previously reported by The Real Deal Chicago, is the latest example of office landlords struggling to make loan payments or pay off loans as they mature — or, in this case, both. The move to special servicing came just months after the loan’s maturity date was extended from this June to June 2025, according to CoStar loan commentary.
The tower is about 84% leased, down from 96% leased when Beacon acquired it in 2016, according to CoStar data.
Beacon’s debt is an interest-only, floating-rate loan, meaning that rising interest rates have pushed up the costs of debt service.
The CMBS loan was moved to special servicing in late July based on Beacon’s “indication that a default was reasonably foreseeable,” according to the loan commentary, which said Beacon did not plan to pay $4.4 million in taxes on the property that were due earlier this month.
It’s unclear why the loan’s status changed so soon after Beacon was given more time to pay it off. Situs did not immediately respond to requests to comment from CoStar News on Wednesday.
In an emailed statement, Beacon said that “330 North Wabash is an extraordinary property” and added that the firm “is currently engaged in active and productive discussions with the special servicer.”
The statement did not specify what is being discussed, but someone familiar with the situation said Beacon is seeking modifications to the loan to retain control of the property.
AMA Plaza’s original name was IBM Plaza. The tower’s original owner and occupant commissioned the design from the famed architect in 1966.
Mies van der Rohe designed the tower before he died in 1969, and it was completed in 1972. IBM sold the building in 1996, and the company no longer occupies space in the tower.
At 695 feet, it is the second-tallest tower designed by the architect, trailing only Toronto’s Dominion Center, according to the Chicago Architecture Center.
Name Change
The building’s name changed when the American Medical Association signed a large lease more than a decade ago. The AMA remains the building’s largest tenant, leasing almost 253,000 square feet, according to CoStar data.
The lower 13 floors of the tower were converted to a Langham hotel, and that portion of the building is separately owned. The hotel project was overseen by Chicago architect Dirk Lohan, Mies van der Rohe’s grandson.
AMA Plaza is across the street from the second-tallest skyscraper in the city, Trump International Hotel & Tower.
Boston-based Beacon bought AMA Plaza and the leasehold interest in a nearby parking garage for $467.5 million in 2016. It refinanced the property with the $370 million loan originated by Morgan Stanley and Goldman Sachs in June 2021.
AMA Plaza is one of several office buildings that Beacon owns in Chicago. Most recently, the firm in June paid $125 million for the 36-story tower at 333 W. Wacker Drive.
That was the highest price for a Chicago office building in more than two years, a deal that also reflects falling property values. The tower’s previous sale price was $320.5 million in 2015 as prices were soaring.
Other Chicago office buildings owned by Beacon include 515 N. State St., 303 E. Wacker Drive, 190 and 231 S. LaSalle St., 1 N. Dearborn St. and 425 S. Financial Place.
Beacon also is a partner with Trammell Crow on life sciences developments in the Fulton Market district and in Hyde Park on the city’s South Side.