T
he LaSalle Street office building was transferred to Torchlight Loan Services, a New York-based distressed debt specialist, after a joint venture between Hearn and New York-based Fortress decided to surrender it over a year after a $137 million mortgage loan on the property matured. The debt was bundled with other loans and sold to commercial mortgage-backed securities investors, which faced repayment challenges amid declining office demand and rising interest rates. Despite relinquishing the building’s title, Hearn continues to manage the property and is working with Torchlight to revive its fortunes. The building's estimated value is significantly lower than its outstanding loan balance, but Hearn remains hopeful about its potential for a comeback due to recent positive cash flow. The city of Chicago has been a reliable tenant, occupying nearly half of the building's space, and there are additional leasing opportunities available as law firm Neal Gerber & Eisenberg plans to vacate its space next year. The building's location near the James R. Thompson Center, which is being redeveloped into Google's new Midwest headquarters, could also work in its favor. The move by Hearn and Fortress reflects broader challenges facing Chicago's downtown office market, which has experienced a series of foreclosures and property handovers as landlords struggle with financial pressures and lenders seek repayment or collateral secured by debts in default.