In the West Loop, the complex financing stack at 300 South Riverside Plaza has reportedly cracked into an alleged $342 million double default that now has both the tower’s leasehold owners and the land investors in the danger zone. Building owners David Werner and Joseph Mizrachi are accused of falling behind on a $175 million mortgage, while the landowners’ $167 million ground loan has been pushed into special servicing. The one-two punch, on both the building and the dirt underneath it, leaves the property exposed to potential foreclosure or a court-appointed receiver.
Special servicer steps in, and why it pulled the trigger
According to The Real Deal, the ground loan was originated by Morgan Stanley, sliced into CMBS pools MSBAM 2015-C22 and MSC 2015-MS1, and then transferred to special servicer LNR Partners for what was described as an “imminent default.” The servicer issued a formal notice of default on Nov. 21, 2025, and accelerated the debt to be due in full on Dec. 11, 2025, while hiring local counsel to explore foreclosure and the appointment of a receiver. LNR is said to be “dual-tracking” workout talks at the same time it lines up enforcement options, a classic playbook move when a loan looks like it could go either way.
Tenants keep shrinking their footprint
On the revenue side, tenants have been quietly pulling the rip cord on space that used to help cushion the building’s finances. Zurich North America announced a move to Willis Tower, signing for about 52,000 square feet as it trims its downtown presence in a transition scheduled for summer 2026. That relocation, alongside other subleases and downsizes in the building, has made it tougher for the owners to cover debt service and lease-back obligations, market observers say. In a market already flooded with available offices, every departing tenant cuts a little deeper into the building’s ability to keep its lenders happy.
Werner’s nearby play and new money for a different tower
Even as 300 South Riverside faces mounting pressure, Werner has been active on another front. A joint venture that includes David Werner and 601W Cos. recently secured financing from Northwind Group to acquire and reposition 175 West Jackson Boulevard, according to a loan announcement. Northwind provided a $58.5 million first-mortgage package, split between a $33.5 million initial advance and a $25 million “good-news” facility earmarked for leasing costs and upgrades. The structure highlights the bargain pricing and opportunistic capital circling distressed Loop assets, and is intended to give the new owners cash to chase tenants and stabilize that property.
How split ownership made a bad situation worse
The mess at Riverside Plaza also shows how split ownership can magnify the damage when things go sideways. Werner and Mizrachi control the building, while Cammeby’s, led by Rubin Schron, and World Wide Group, led by David Lowenfeld, hold the land under a long-term ground lease. The Real Deal reports that the leasehold owners missed the October ground installment, which yanked the ground lender’s $167 million CMBS debt into special servicing. The leasehold was already in trouble on a separate Shinhan loan as far back as 2023. Major tenants shrinking or leaving, including a sizable downsizing by Cars.com, have left income thin just as both the land and building loans head toward enforcement. When everyone in the capital stack needs to get paid, and the rent roll is shrinking, there is not a lot of room for error.
Legal outlook…