Thank you for supporting our journalism. This article is available exclusively for our subscribers, who help fund our work at the Chicago Tribune.Wanxiang America Real Estate Group, which bought One Two Pru, seen here on May 31, 2017, for $680 million in 2018, said it requested a transfer of the property’s $389 million loan to special servicing, more than two years ahead of the 2025 maturity date.
“When people hear special servicing, they put a negative spin on it, but in this case it’s positive news,” Wanxiang Managing Director Larry Krueger said. “We think it may take longer than two years for the market to stabilize, and we don’t want to worry about our underlying debt in the meantime.
The 2.3 million-square-foot One Two Pru is 78% occupied, but Wanxiang expects occupancy to decline over the next few years as some leases expire. Tech firmDowntown office vacancy hit a historic high of more than 22% early this year as many companies shrank or abandoned their offices in favor of work-from-home strategies, according to Colliers International.
“The debt market is pretty frozen right now, especially in the office sector,” he said. “People have been calling it Armageddon, and most feel it’s going to get worse before it gets better, so generally speaking, it might be prudent to get ahead of this.”