The owners of a 28-story office tower on Chicago’s Magnificent Mile are in scramble mode after the building’s $50.6 million commercial mortgage was shifted into special servicing, a move that often signals a looming lender workout or foreclosure. The office portion at 625 North Michigan Avenue has suffered a sharp drop in occupancy and revenue, leaving Abu Dhabi-based BlueFive Capital and Chicago’s Golub & Company urgently trying to plug a serious cash-flow hole.
According to The Real Deal, LNR Partners was tapped as special servicer after loan commentary collected by Morningstar Credit flagged the debt for “imminent default.” The report says the office portion’s performance has fallen far below the original underwriting assumptions, putting the mortgage on a clear path toward possible foreclosure if the owners cannot restore revenue or lock in fresh financing.
Industry notes summarizing servicer commentary show that occupancy at the roughly 290,000-square-foot office block slid to just under 64 percent this summer, down from about 92 percent when the loan was originated. Net cash flow is running roughly 43 percent below issuance underwriting, and the debt-service-coverage ratio was hovering near 0.41 in early 2025, with the outstanding loan balance still around $50.6 million, as reported by Connect CRE.
Ownership shifts and how we got here
Golub & Company has kept a stake in the property, while BlueFive Capital took control after absorbing Dubai-based Neo Capital in September, a deal that expanded BlueFive’s North American portfolio. The Real Deal notes that Neo paid roughly $72 million for CIM Group’s stake in 2019, and that BlueFive said it folded about $650 million of Neo assets into its platform through the transaction.
The retail portion was already surrendered
The lower floors of the building, held as a separately owned retail condo, were handed back to a lender last year after investor Ben Ashkenazy resolved a $61 million obligation via a deed-in-lieu. That move further fractured control of the site and left the office side on its own island. As a result, the office lenders and the special servicer are now dealing with a stand-alone workout for the tower’s office component, according to reporting compiled by Connect CRE.
What special servicing could mean
When a CMBS loan heads into special servicing, authority over what happens next shifts to a party whose duty runs to the trust’s investors rather than to the borrower. That special servicer can negotiate a restructuring, pursue a lender-driven sale, or move the process toward foreclosure. Reuters explains that special servicers deliver detailed reporting on troubled assets to controlling certificateholders and often weigh borrower workout proposals against alternatives such as selling or repossessing the collateral, with decisions heavily shaped by investor interests.
How this particular drama plays out will hinge on whether BlueFive and Golub can stabilize leasing, bring in quick capital, or land a buyer willing to pay a meaningful price. If those efforts fall short, the special servicer could push the property toward a steeply discounted sale. Golub lists 625 North Michigan as a roughly 290,000-square-foot, 27- to 28-story office tower on the Mag Mile, a reminder that a fire-sale outcome would mark yet another blow to the corridor’s still-fragile post-pandemic recovery.
