KBS Realty Advisors is on the clock with its loan on a West Loop office skyscraper.
The California-based company was granted a month-long extension of the $375 million loan tied to Chicago’s 40-story Accenture Tower at 500 West Madison Street, it reported last week in an SEC filing.
The landlord said in the filing on Nov. 8 that the three-year loan from U.S. Bank taken out in November 2020 came due earlier this month and it’s been given some short-term reprieve as the borrower tries to meet conditions to get a longer extension. The loan totaled $375 million, with $281.3 million considered term debt, and $93.7 million of revolving debt.
It came due on Nov. 2, and KBS and U.S. Bank modified the initial maturity date to Dec. 4. The loan originally had two 12-month extension options “subject to certain terms and conditions contained in the loan documents,” according to the filing. It’s unclear why KBS didn’t or couldn’t pursue the first of its yearlong extension options.
KBS declined to comment on the details of why it pursued the two-week extension rather than locking in a yearlong stay, other than to say that it was a required filing based on certain SEC guidelines and that negotiations with the lender are ongoing.
Originally completed in 1987, the 1.5 million-square-foot Accenture Tower is connected to the Metra commuter rail system’s Ogilvie Transportation Center. And KBS recently put $10 million into the renovation of its third-floor office lobby, including an expansion of a lounge with a staffed bar, a landscaped outdoor terrace and a new conference center, according to Stream Realty, the brokerage representing KBS in leasing at the property. The recent improvements, along with a spec suite buildout program the two companies have started at the property, have helped land more than 250,000 square feet in spec suite leases, Stream says on its website, which also said the brokerage brough the tower to 95 percent leased.
The property was renamed Accenture Tower when the consulting firm Accenture expanded its lease there in 2019 to 260,000 square feet, from its previous footprint of about 75,000, according to Stream. Former Mayor Lori Lightfoot came by the tenant’s new space last year shortly after it opened following the completion of an interior buildout, and tried to urge a more forceful return-to-office among Chicago office tenants and employees.
The question over the fate of KBS’ loan extension comes among the firm making other headlines this year. In August, its former chief auditor pleaded guilty to embezzlement from the company after stealing about $2.7 million from KBS between 2012 and 2022.
The company has also had real estate troubles in its home state of California, where it was founded by Peter Bren and Chuck Schreiber in the 1990s.
Also in August, one of the funds tied to the company announced in a regulatory filing that it planned to surrender an 18-story office building in San Francisco to its lender. This month, the lender on the building, PGIM Real Estate Finance, announced it had cut a deal to sell the 252,600-square-foot office building for $70 million. KBS purchased the building in 2013 for $121 million.