blackstone inc began talks with its lenders about options on a maturing 3098 million senior loan on a 13 millionsquarefoot office complex in chicago’s largely desirable river north neighborhood blackstone bx remains current as of its last may 9 payment on the classa office complex at 350 north orleans street which competes with highpremium addresses in its location just north of the central business center known as the loop but the debt has transferred to special servicing according to creditrating firm kbra transferring a loan to special servicing signals the kickstart of discussions between a borrower and a lender when loans in bond deals look at risk of defaulting the loan comes due in july blackstone one of the world’s largest investors in commercial real estate has long been a favored borrower for wall street often receiving the lowest rates available and ample access to debt but more borrowers with maturing debt this year have been seeking debt extensions loan modifications or simply handing back properties to lenders as an era of cheap and abundant credit ends related debt on trophy office buildings is starting to buckle as loans come due in a sign of the times for beleaguered office buildings as more workers take advantage of workfromhome or homeoffice hybrid arrangements with employers blackstone wrote down its investment in the chicago property to zero last year that means it no longer has an economic value which can occur when the debt on a building exceeds the value of the property “the property is experiencing the well known headwinds facing us traditional office buildings lacking firstclass modern amenities and this location in the river north submarket has been particularly challenging which is why we effectively wrote this investment down to zero last year” blackstone said in a statement the building’s occupancy was last pegged at 754 in december but down from 921 when the floatingrate loan was originated five years ago by goldman sachs gs  according to kbra nationally office buildings sit roughly halfempty three years since the pandemic shutdowns of 2020 the borrower is a blackstone affiliate the blackstone real estate partners viii fund which reported a 16 return for the fund through the first quarter of 2023 globally blackstone manages 585 billion in real estate “what you own matters and us traditional office represents less than 2 of our global portfolio today vs more than 60 in 2007 blackstone said about its exposure to the office sector “we intentionally pivoted toward sectors like logistics and data centers which are benefitting from exceptionally strong macrotailwinds and supplydemand fundamentals” a blackstone spokesperson said the transfer didn’t singal the borrower was handing back the keys to its lender meanwhile the original 310 million loan is nonrecourse meaning the lender can’t pursue any other of blackstone collateral to repay the debt related losing the trophy a 45 billion mortgage bill is coming due for some of america’s signature commercial properties stocks were mixed on monday with the dow jones industrial average djia about 70 points lower at last check the sp 500 index spx was up 03 and the nasdaq composite index comp was 07 higher according to factset blackstone inc shares were up 24 in monday action but are down some 21 over the past year