A half-empty Loop office tower on LaSalle Street has slipped onto the market with little fanfare. Two North LaSalle, a 26-story building with roughly 713,000 rentable square feet in the heart of the central business district, is being shopped by the lender after years of sluggish leasing. Any buyer, however, will inherit a major tenant that is not going anywhere anytime soon: the city still occupies a large block of space under a long-term lease.
JLL leans on location and move-in-ready space
JLL is handling the assignment, and its marketing materials lean hard on upgraded common areas and ready-to-go spec suites. As reported by The Real Deal, brokers are pitching the upper floors and the property’s position near several redevelopment projects as the big draws. The brochure highlights fitness facilities, conference rooms and renovated spec suites, all aimed at tenants who want to avoid build-out headaches. Those details are laid out in the JLL brochure.
Debt woes put the lender in control
New York-based Torchlight Loan Services now controls the asset after its CMBS loan matured in August 2023 and the property was handed to the special servicer, according to CoStar. CoStar pegs the remaining loan balance at about $138 million and notes that previous owners Hearn and Fortress had already poured roughly $10 million into lobby upgrades and spec suites before giving up the keys. The outlet also points to other distressed deals in the area, including recent trades that show there are buyers willing to roll the dice, but only at sharply discounted prices.
Betting on a "Google effect" a few doors down
Brokers are openly banking on a so-called “Google effect,” the idea that Google’s high-profile redevelopment of the Thompson Center could boost demand up and down LaSalle Street. The Real Deal and other market coverage note that Two North LaSalle sits just north of the Helmut Jahn-designed Thompson Center project, a detail now featured prominently in the sales pitch. Whether that proximity can offset today’s financing hurdles and the very real vacancy risk at this tower is another question.
City lease keeps lights on, vacancies offer upside
The tower totals about 713,000 rentable square feet, with large floorplates of roughly 28,000 square feet and significant availability higher up, according to listing materials and market data. The city of Chicago holds around 319,000 square feet under a lease that runs into 2035, with about 1,200 municipal employees working out of the building, per CoStar. While Torchlight holds title on behalf of bondholders, Hearn is still listed as the on-site manager in marketing materials and on the project page for the asset at Hearn Company.
Buyers face a fork in the road
Any buyer will be choosing between a relatively near-term lease-up play, banking on momentum along LaSalle Street, and a longer, heavier lift involving a major repositioning or even a conversion that would demand serious capital and patience. With CMBS structures in the background and a sizable loan balance still on the books, a sale is likely to appeal most to opportunistic investors who are comfortable with above-average execution risk. For now, brokers are selling Two North LaSalle as a discounted entry ticket into a corridor that some in the market insist is finally starting to turn the corner.
