A four-story retail building at 400 North State Street in River North is headed toward foreclosure after its lender accused the ownership group of defaulting on a $9 million loan, even as city permits sit approved for a $3 million restaurant conversion inside the same building. Old Second National Bank filed suit seeking to foreclose on and sell the property, and is also pursuing $2.9 million from investor Marc Bushala personally under a loan guarantee.
The bank filed its complaint in Cook County Circuit Court on October 26, according to The Real Deal, which first reported the foreclosure action. Old Second alleges that Great Street LLC, the borrower, owed roughly $9 million as of October 21, with additional interest still accruing. The suit also names MAB Capital Management, WFB Gift, and Bushala himself as defendants, and the lender is seeking to recover $2.9 million from Bushala under the terms of his personal guarantee.
Great Street LLC is registered to a Chicago address connected to Bushala's Spirits Investment Partners, per the same report. Bushala signed for the borrower through an entity called Phoenix Group Management, according to the outlet's reporting.
A Restaurant Conversion Already Approved
The building at the center of the dispute was last renovated in the 1980s and currently houses two tenants: Dough Bros pizza and Ghost LLC, described in LoopNet listing information as a manufacturing firm. But the property has bigger plans on paper. The City of Chicago has already signed off on a $3 million permit covering interior buildout and exterior renovations at the address, work that would convert the ground and second floors of the existing four-story structure into restaurant space.
Architect Hemal Purohit is listed as the designer on the project, with Aberdeen Construction Services Incorporated serving as general contractor, the report notes.
Bushala Says He's Fighting to Keep the Building
For his part, Bushala insists the ownership group has no intention of walking away. He told the outlet the owner wants to hold onto the building and is already working toward a solution. “We are in advanced discussions on the recapitalization of the property, which includes restructuring of the current loan,” Bushala said, according to the report.
Bushala declined to share further details about the recapitalization talks but said he expects a positive resolution shortly. Under Chicago rules governing vacant and distressed properties, filing a foreclosure lawsuit does not by itself strip an owner of title — ownership does not end until a judge signs what the City of Chicago calls an “Order Approving Sale” and a Judicial Sales Deed is recorded with the Cook County Recorder of Deeds.
A Pattern of Deals and Exits for MAB Capital
This isn't Bushala's first high-profile transaction in Chicago's commercial real estate scene. MAB Capital previously sold a pair of buildings at 400 and 401 North Morgan Street in Fulton Market to Vista Property Group for nearly $31.7 million back in 2020, per CoStar data cited in the same report. Bushala has also considered cashing out of another Fulton Market holding, at 450 North Morgan Street, the outlet reported.
The River North case lands amid a broader wave of foreclosure activity hitting Chicago-area commercial properties. A $310 million foreclosure suit targeting a West Loop office building at 540 West Madison has been linked to falling downtown office property values. Separately, the Illinois Center office complex was reported heading toward a foreclosure auction, which Crain's tied to lingering financial strain across the downtown office market.
