A foreclosure lawsuit has been filed against Inland Real Estate Corp. for allegations that the Oakbrook-based company stopped making payments on two separate Algonquin Commons shopping center loans last summer, according to media reports.
U.S. BANK N.A. filed the foreclosure suit in Kane County Circuit Court in December, seeking repayments of the two loans totaling $109 million, according to the Daily Herald.
The Daily Herald reports Inland ongoing vacancies and certain leases that "allowed some tenants to reduce their monthly rents" as a source for its financial woes.
The Chicago Business Journal reports the lawsuit filed against the 565,000 square foot property is one of the largest foreclosure cases filed in the Chicago area in recent years.
Crain's Real Estate Daily reports that in 2011, Algonquin Commons' net cash flow dropped "nearly a third" to $3.5 million while its annual debt service costs totaled $5.3 million.
Real Estate Daily cites a New York research analyst who touches on the overall financial difficulties facing shopping center owners in recent years as borrowers face difficulties refinancing loans and the threat of losing one large tenant that causes others to follow.
In September, Algonquin Commons had 88 percent of its vacancies filled, according to the Chicago Business Journal.
There has been plenty of turnover at the Commons in the past two years. Most recently, Williams-Sonoma announced it would leave the Commons, with its final day this Sunday.
One of the more notable closures came over the summer of 2011 when the Commons' Borders closed its doors as part of the book store chain’s reorganization under Chapter 11 bankruptcy.
A portion of the space has since been filled by Family Christian Stores. Half Book Stores will soon occupy the remainder of the space, with plans to open in late March or early April, according to the Algonquin Commons website.