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west suburban commercial real estate complex has been severely impacted by the depressed Chicago-area office market. A joint venture between Red River Asset Management and Lincoln Property Company defaulted on a $15.2 million loan against their 174,000-square-foot building at 701 East 22nd Street in Lombard. The loan was transferred to special servicing after the borrower expressed inability to pay off the debt upon maturity.

    This is the second time a landlord in the area has faced an unpaid lender's consequences since the pandemic reduced demand for office space, causing suburban vacancy rates to soar to 31 percent. A nearby building at 747 East 22nd Street also defaulted on its $16.9 million loan in 2019 and was subsequently foreclosed upon by Reef Capital.

    The Red River-Lincoln Property venture had purchased the Lombard property for $23.4 million in 2017, but it's now only about 50 percent leased, down from over 80 percent last year. The struggling office buildings contribute to a string of suburban Chicago office deals that have fallen apart due to loan defaults or decimated property values.

    Lincoln Property Company and Red River Asset Management have also been involved in successful transactions elsewhere. Lincoln purchased an office complex in California for $187.5 million, while Red River bought an Evanston office property at a significant discount from its previous sale price.