Case | HBS Case Collection | June 2009 (Revised October 2010)

Busse Place

by Arthur I Segel, William J. Poorvu, Richard Kessler and Justin Seth Ginsburgh


Busse Corporate Center's largest tenant recently declared bankruptcy, leaving the building 38% occupied and significantly overleveraged. In a depressed suburban Chicago office market, Marisa Sanchez, the leasing agent, has to negotiate lease proposals with three prospective tenants to try to fill the vacant space. Meanwhile, the building's owner, Collins Properties, must decide with its equity partner whether to continue funding the building's losses while trying to lease the vacant space, restructure the debt, or default on the loan and turn the building over to its lenders. The decision is made more complicated by Collins' use of a Commercial Mortgage Backed Security (CMBS) Loan, which involves multiple parties, ambiguous relationships, and bifurcated responsibilities.

Keywords: Buildings and Facilities; Restructuring; Borrowing and Debt; Financial Management; Mortgages; Investment; Leasing; Property; Real Estate Industry; Chicago;


Segel, Arthur I., William J. Poorvu, Richard Kessler, and Justin Seth Ginsburgh. "Busse Place." Harvard Business School Case 209-154, June 2009. (Revised October 2010.)