A Pennsylvania-based multifamily investor is preparing to assume ownership of a building in downtown Chicago from the developer that transformed it from office space to residential units. An LLC associated with Lindy Communities’ Jenkintown, Pennsylvania address acquired the loan note representing the 17-story mixed-use property at 330 S.

The property is now headed for a foreclosure auction next month after a judge ruled the note is in default. In 2018, LG Development Group and Marc Realty began converting the 137,000-square-foot office building into 132 apartments with 24,000 square feet of refurbished workspaces and first-floor retail. They secured a $27 million construction loan from Regions Bank for the project.

Financial Struggles and Foreclosure

An affiliate of Prime Finance refinanced the construction debt in 2021 with a $28.2 million mortgage. The loan matured in February 2025 and was declared in default after the borrowers failed to pay it off, according to court documents.

The loan was sold to Lindy’s affiliate for $15 million, a 47% discount. As of early September, the total amount due was approximately $33.3 million.

The property faced financial challenges as interest on its floating-rate debt increased, while rents struggled to keep pace. By the end of 2023, debt service of $2.4 million exceeded net operating income of nearly $1.9 million, despite maintaining 97% occupancy.

Auction and Future Plans

If Lindy Communities acquires the property at the foreclosure auction, it can apply the outstanding balance on the loan as a credit toward the purchase price, according to court documents. The sheriff’s auction is scheduled for November 3. Lindy Communities owns approximately four dozen multifamily properties nationwide, including four others in the Chicago area.

Prime Finance made another major Chicago move earlier this year. The company, primarily a commercial real estate lender but an occasional buyer, entered a preliminary agreement in June to acquire the 31-story office building at 225 W.