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hicago real estate investor Igor Gabal is poised to add two more historic Loop office buildings to his portfolio after securing significant discounts on loan notes from their original creditors. Alongside partner Ruben Espinoza, who owns 300 West Adams Street with Gabal, they claim to have deals in place for the Burnham Center and 19 South LaSalle Street. The latter is set to be converted into 175 apartments at a cost of around $53 million.

    The LaSalle Street deal closed recently after Espinoza agreed to surrender the deed to the Gabal-backed venture that purchased the troubled building's loan note for $4.2 million, a substantial cut from the $19 million still owed on the debt. For the Burnham Center, Gabal is set to close on a $5 million acquisition of the loan note tied to the ground underlying the 584,000-square-foot building at 111 West Washington Street.

    The deal represents an eye-popping 88% discount from the $42 million loan that The Shidler Group owes to an insurance company represented by Wells Fargo. Gabal and Espinoza aim to keep the Burnham Center as mostly an office use, although it was only 65% leased when Golub hired Cuhsman & Wakefield last year to try to sell the building before the landlord's loan default.

    The pair is on the hook to pay ground rent payments to Shidler for 300 West Adams, which remains the owner of the underlying ground while Espinoza and Gabal own the leasehold. The deal for the Burnham Center could help improve their position at 300 West Adams. Meanwhile, an Espinoza-led venture was hit with a foreclosure lawsuit for 19 South LaSalle by an entity representing Ready Capital in 2022.

    Gabal recently overcame a lawsuit brought by investor John Thomas claiming Thomas was wrongly cut out of the deal to buy 300 West Adams. Espinoza is also facing several legal battles, including a foreclosure lawsuit filed last week that threatens his plans to revamp a suburban Chicago hotel.