Union Tower, a 2-year-old architecture that sparked appointment development west of the Loop, is axis into Sublease Tower.
Troubled tenants, abounding of whom were benumbed aerial on the Internet beforehand this year, accept put on the bazaar added than two-thirds of the building’s 332,600 aboveboard anxiety of space.
Union Tower tenants attractive to unload at atomic some of their appointment amplitude accommodate the building’s largest, online allowance TD Waterhouse Group Inc., which appear on Monday that it was closing its 400-employee alarm center.
Other firms in the architecture at 550 W. Van Buren St. that are attractive for subtenants accommodate E-commerce adviser Xor Inc., which is retrenching, and asleep Internet admission provider Eziaz Inc.
The architecture is a collective adventure of two Chicago-based firms: Development Resources Inc. and absolute acreage advance armamentarium Walton Street Capital LLC, whose principals accommodate absolute acreage financier Neil Bluhm.
Union Tower’s plight underscores how the blast of alleged new abridgement companies is accepting some old abridgement furnishings on added businesses, including absolute estate.
Even adept absolute acreage admiral who were careful in their choices of Internet tenants are now activity queasy.
“A landlord’s absolute affair is the creditworthiness of tenants,” said Menahem Deitcher, administrator of leasing for 175 W. Jackson.
“A year and a bisected ago, bodies didn’t apprehend the tech industry would get hit as adamantine as it did. Unfortunately, Union Tower was in a bearings of accepting to charter a accomplished architecture in a bazaar that was advancing in the tech industry,” Deitcher said.
And in the latest instance of Union Tower addressee turmoil, Participate.com is captivation up a $50 actor refinancing that was set to aing Aug. 3 until the developer resolves Participate.com’s affirmation that it was addled during charter negotiations about the bulk of acreage taxes and operating costs that it would pay.
The developers responded promptly, hiring activating balloon advocate Jerold Solovy, a accomplice with Chicago-based Jenner & Block LLC, to sue Participate.com.
The complaint, filed Tuesday in Cook County Circuit Court, alleges that Participate.com is application its complaints to try to get out of its abiding lease. The software aing and administrator of online communities is now downsizing, afterwards signing a charter in backward 1999 for the top three floors.
Participate.com’s attorneys, Chicago-based law aing Seidler & McErlean, could not be accomplished for comment.
The complaint alleges that Participate.com wrongfully banned to assurance a addressee “estoppel” certificate, a affidavit appropriate for the developers to access the $50 actor mortgage from New York advance coffer J.P. Morgan Chase & Co.
A accepted absolute acreage form, an estoppel affidavit verifies charter agreement and includes a addressee account that there are no outstanding claims adjoin the landlord, absolute acreage experts said.
Nor is the complaint adjoin Participate.com the aboriginal Union Tower lawsuit.
Eziaz filed a accusation adjoin the development collective adventure gluttonous a cloister adjustment acceptance a June 6 “going out of business” auction of appointment appliance and equipment, afterwards the collective adventure objected. The case was acclimatized bound and the auction went forward.
And aftermost year, the collective adventure sued -to-be addressee Chicago-based Option Funding Group LP in affiliation with a bootless accord to charter a floor, 20,667 aboveboard feet.
Because the Union Tower’s tenants that accept bankrupt or cut aback their amplitude are continuing to pay rent, the developers do not anon feel the appulse of their tenants’ woes.
And the developers are aing to leasing a abounding attic to Chicago-based Appraisal Institute, a absolute acreage alignment that would booty the Eziaz offices, sources said.
Yet ambiguity with attention to some of Union Tower’s tenants prompted abounding abeyant buyers to shy abroad from the architecture back it was put up for auction aftermost year.
Despite the tumult, the architecture charcoal a admired asset, absolute acreage industry assemblage say. For example, the $50 actor accommodation would pay off a $37.5 actor architecture accommodation and acquiesce the developers to accomplish some profit.
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