A Greektown building defaulted on its first mortgage of $18.4 million barely one year after emerging from Chapter 11 bankruptcy.
The venture owned by a husband-and-wife team from Wisconsin has missed mortgage payments on 833 W. Jackson Blvd. since March, according to a complaint filed by Wells Fargo Bank N.A.
The property has not managed to come back to full occupancy after the collapse of a key tenant, Krahl Construction. Krahl Construction went out of business after it was raided by the FBI in 2010. The building’s vacancy rate is up to 24.5% after being almost fully leased in 2009, according to real estate data provider CoStar Group Inc. and court documents.
The property is two buildings separated by a parking lot. One is an eight-story structure built in 1910, and a five-story structure built in 1924. Vintage office spaces such as these are struggling to find tenants due to lower quality office space.
The burden of turning around the property may shift to MCZ Development Corp., who holds a $1.2 million mezzanine loan on the buildings. Michael Lerner of MCZ Development must refinance the first mortgage or face foreclosure by Wells Fargo. A foreclosure by Wells Fargo could potentially wipe out the $1.2 million investment.
The owners of the venture filed a Chapter 11 bankruptcy petition in an attempt to hold off the foreclosure, one year after emerging from a previous Chapter 11.
Corporations of all kinds take advantage of the legal resources to save the business from going under. Individuals who face similar circumstances are able to use the exact same resources in order to minimize disruption to their lives. Bankruptcy is an excellent tool for reorganizing personal finances and getting a fresh start.
Benjamin Brand Services – Chicago bankruptcy lawyer