B
eacon Capital Partners is pushing back against a foreclosure lawsuit filed by a CMBS lender over its $370 million debt on Chicago's AMA Plaza skyscraper. The Boston-based firm, one of Chicago's largest office landlords, claims it can still work out a deal to avoid losing the 52-story riverfront property. Beacon acquired AMA Plaza for $467 million in 2016 and took out floating rate debt in 2021.

    The lawsuit alleges that Beacon missed a $3.8 million property tax payment and monthly debt service payments, leading to a loan default. However, Beacon says it has remained in talks with the lender about restructuring the loan and hopes to reach a "productive outcome." The firm believes the foreclosure action is premature and inappropriate.

    AMA Plaza's net operating income of $27.4 million last year fell short of its $28.1 million debt service, pushing it closer to default. Despite this, Beacon has secured a one-year extension on the loan by paying down $5.9 million of the debt. The building's occupancy rate has also declined from 96% at acquisition to around 84%, with AMA recently extending its lease through 2035 but reducing its space.

    Beacon faces another looming deadline to repay a $156 million loan on its 303 East Wacker Drive property and has sought a buyer for that building. However, the firm remains confident in Chicago's office market, having purchased 333 West Wacker for $125 million this year. Beacon's portfolio includes several other Chicago office properties, but the company is facing ongoing financial strain.