A Chicago-area investor intends to scoop up a 23-story vintage office building in the Loop business district at what may be a significant discount to the value of the loan, more than two years after the owner was hit with a foreclosure suit.
Sanjay Gandhi has a deal to buy the high-vacancy tower at 205 W. Randolph St., according to people familiar with the situation. The sale price for the 104-year-old structure could not be determined, but it is believed to be well below the value of an $18.7 million loan that the previous owner failed to pay off.
If the sale is completed, it will be the latest example of older office properties in Chicago and other cities trading hands for less the amount needed to pay off debt.
Buyers such as Gandhi believe they can turn high-vacancy properties profitable again by starting at a low enough investment basis that it leaves funds to bring in new tenants.
Gandhi has been among the bargain shoppers in Chicago, paying just under $11.3 million for the 10-story building at 29 N. Wacker Drive in August 2024. That was a steep discount to the $29.7 million that insurance giant Allstate paid for the property in 2022 as it considered using some of the building for its own offices.
Gandhi’s plans for the tower at 205 W. Randolph St. are unclear. Gandhi, who also owns office buildings at 218 and 26 S. Wabash Ave., did not respond to requests for comment from CoStar News.
The property is being sold at auction by LNR Partners, the special servicer for a commercial mortgage-backed securities loan that was made to the previous owner, New York-based Alvarez & Marsal Property Investments.
That venture assumed the CMBS loan as part of its $28.7 million purchase of the building in 2017, before occupancy plunged in recent years.
Alvarez & Marsal was hit with a foreclosure suit on behalf of bondholders of the CMBS debt in 2024. Alvarez & Marsal stopped making loan payments in late 2023, and the loan was set to mature in early 2025, The Real Deal Chicago reported at the time of the lawsuit.
The special servicer seized the property in August 2025, according to Cook County property records.
LNR and Alvarez & Marsal did not respond to requests for comment from CoStar News.
The 207,506-square-foot building is just 62% leased, with a weighted average lease term of 3.4 years, according to materials from Newmark, which is brokering the sale.
The building is next to a 33-story office tower at 225 W. Randolph St. that recently was redeveloped by Canada’s Onni Group for new tenants such as law firm Neal, Gerber & Eisenberg. That project is branded The Bell, a reference to its origins as the Illinois Bell Building when it opened in 1966.
Gandhi’s deal for 205 W. Randolph comes after years of Chicago office sales out of financial distress.
In one recent example, a joint venture of Franklin Partners and Bixby Bridge Capital acquired the matured debt on the 23-story tower at 200 W. Monroe St. for about $16 million, CoStar News reported last week. That was far below the value of the unpaid, $75 million loan provided to the property’s previous owner.
It was those partners' third deal for distressed, Chicago-area office properties in two years.
Larger deals recently completed downtown include $131.5 million paid for the 35-story tower at 401 N. Michigan Ave. and $125 million paid for the 50-story tower at 161 N. Clark St.
For the record
The seller is represented by Newmark brokers Jim Postweiler, Peter Harwood, Derek Fohl and Jack Trager.