Alden Global Capital Takes Loss on Suburban Chicago Office

The real estate arm of a private equity firm known for gutting local newspapers, including the Chicago Tribune, sold a suburban office complex for a $1.3 million loss this month.

Twenty Lake Holdings, an affiliate of New York-based Alden Global Capital, sold the Cantera Crossing office park in Warrenville for $7.5 million, or $50 per square foot, Du Page County records show. The private equity firm bought the building for $8.8 million, or $59 per square foot, in 2020 with a $5.7 million mortgage from Belmont Bank.

OSI Group, a meat processing company based in Aurora, bought the 149,000 square foot building. No mortgage has been recorded yet.

Representatives of Twenty Lake and OSI did not respond to requests for comment.

Alden Global was at the center of controversy in 2021 when it completed its $633 million purchase of the Tribune’s parent company, Tribune Publishing. The publisher’s portfolio includes The Baltimore Sun and The New York Daily News among other publications. Alden Global had at the time developed a reputation for buying local newspapers and significantly reducing staff and resources.

When word spread that the firm was circling in on Tribune Publishing, journalists began a public, but ultimately unsuccessful, push to persuade shareholders not to sell or to find an alternative buyer.

The Alden affiliate Twenty Lake Holdings is far from the only real estate firm suffering losses in Chicago’s suburban office market.

Last month, San Diego-based Realty Income sold an 818,600-square-foot office complex in Lincolnshire for a 95 percent discount. Fort Worth, Texas-based Woodcrest Capital bought the complex for $6.2 million or about $7 per square foot. Realty Income had acquired the property in 2021 through a merger with Phoenix-based Vereit, which purchased it for $148 million ($181 per square foot) in 2012.

Although the property was marketed as a redevelopment play, Woodcrest’s head of property management Michael Roy said at the time that the firm plans to keep the complex operating as an office property, with the ability to offer low rates because of the steep discount.

The strategy could pay off as the office market begins a shaky recovery from the pandemic. Chicago’s suburban office market recorded its highest net absorption since the pandemic in the first quarter, according to Colliers.

New leases totaled 517,000 square feet after factoring out vacated leases. Sublease activity declined in the first quarter as well. The new leasing activity marked a potential turning point since the pandemic.

Previously, the suburban Chicago market had lost more leased office space than it gained in 9 out of 12 quarters since the beginning of 2022.