As its owner faces a pending foreclosure lawsuit, a 225-space garage at 150 E. Huron St. is set to go up for auction this spring, according to a listing from Chicago-based auctioneer Rick Levin.
The offering stands to measure investor sentiment about commercial properties in the heart of downtown with the coronavirus-bludgeoned central business district in the early stages of recovery from the crisis. It could also provide a noteworthy data point about the value of parking garages in a post-pandemic world.
Up for bidding in the May 11 auction is a garage on five lower floors of a 40-story tower that includes a dual-brand hotel—which is also for sale—and medical offices. A venture of Petaluma, Calif.-based STG Group paid nearly $7.7 million for the garage in December 2018, financing the purchase with a $4.5 million loan from Wintrust Financial, according to Cook County property records.
STG stopped making its loan payments after COVID-19 swiftly shut down most economic activity, pushing Wintrust to file the foreclosure suit in June, according to Cook County court records. At Wintrust's request, the court appointed Walt Rebenson of Chicago-based Ascend Real Estate Group as receiver to maintain the garage.
With court approval, Rebenson is putting the property up for auction as the foreclosure process moves ahead. A Cook County judge would need to sign off on any sale. A spokesman for STG Group couldn't be reached.
Levin is marketing the property as an opportunity to reopen the garage to capitalize on demand from visitors to Michigan Avenue and the adjacent Northwestern Memorial Hospital campus, as well as the hotel and offices within the building.
The auction listing suggests an opening bid of nearly $3.9 million, though it's far from clear what an investor might pay with little certainty about when the pandemic will subside and what demand for parking will look like when it does.
In one estimate of COVID's impact on parking garages, a 350-space property at 100 E. Walton St. nearby was appraised in December at $3.8 million—roughly half of its appraised value in 2014, according to a Bloomberg report tied to a loan on the property.
Parking garages were facing their own crisis before the coronavirus rocked the economy. The rise of ride-hailing companies like Uber and Lyft and early development of self-driving cars posed a major threat to the parking industry. Now it faces the prospect of far less daily traffic downtown if more people work remotely more frequently in the future.
The pre-pandemic headwinds were already pushing some parking garage owners to seek alternative uses of their properties.
The Huron Street property is going up for auction as ownership of the dual-brand Hampton Inn/Homewood Suites hotel above it is up in the air. Chicago-based Arbor Lodging Partners, which bought the 352-room hotel in 2018, put it up for sale last month while its lender, a venture of Chicago-based Guggenheim Partners, is simultaneously trying to sell a $30 million loan tied to the property.
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