July 21, 2024
Property

Troubled towers: Breaking down Denver’s distressed office properties


Republic Plaza and Wells Fargo Center

A view of downtown Denver from above the Capitol building. (Courtesy of Guerilla Capturing)

Last updated Dec. 13, 2023 – see log of changes at bottom of story

The pandemic brought major changes to how companies use office space — and that has put many landlords in a difficult position.

Interest rates have made refinancing loans difficult. Downsizing and sublease trends have impacted building valuations. All the while, if they haven’t matured already, loans secured by office towers are still inching closer to that date.

BusinessDen scoured county foreclosure records, third-party reports and court filings to determine the downtown and suburban buildings that have exhibited signs of distress — which can take a number of different forms — since the pandemic began.

The below list is not necessarily comprehensive, but will be updated when we have more information, or when a particular property’s situation changes.

Foreclosed/given to lender

Denver Energy Center

Address: 1625 and 1675 Broadway, Denver

Year Built: 1979

DEC 2 scaled 1

Denver Energy Center in 2022 (BusinessDen file)

Square Footage: 785,000

Owner: JPMorgan Chase

Situation: Foreclosed, reverted to lender 

JPMorgan Chase had loaned $114 million to allow the building’s previous owner, Los Angeles-based Gemini Rosemont, to buy it for $176 million in 2013. Gemini missed months of payments, leading Chase to initiate the foreclosure process in late 2021.

A foreclosure auction was ultimately held in June 2022. Chase won because it was the only bidder, offering a credit bid of $88.2 million.

Triad Office Complex

Address: 5660-5680 Greenwood Plaza Blvd., Greenwood Village

Year Built: 1972

P3271949

The office building at 5660 Greenwood Plaza Blvd. (BusinessDen file)

Square Footage: 414,000

Owner: Focus Property Group

Lender: Affiliate of Voya Financial

Situation: Foreclosed; purchased by lender

The owner paid $54 million in February 2020 for the Triad complex, which consists of three identical buildings. It financed the deal with a $53.7 million loan.

In April 2023, Voya sued, saying the owner had defaulted on the loan in multiple ways. A receiver was appointed. Foreclosure proceedings were initiated in July 2023. In early December, Voya purchased the property at auction with a $46.4 million credit big.

7100 E. Belleview

Address: 7100 E. Belleview Ave., Greenwood Village

Year Built: 1981

P7120798

7100 E. Belleview Ave. in 2023 (BusinessDen file)

Square Footage: 179,000

Owner: Westport Capital Partners

Situation: Deed in lieu of foreclosure

Westport paid $19.9 million for the property in December 2015, according to public records. It took out a $21.08 million loan from an affiliate of Voya Financial in December 2019.

The Voya affiliate sued in July 2023, saying the owner had defaulted on the loan by terminating the building’s management agreement without Voya’s consent. A receiver was appointed. In late August 2023, the lender said in court filings that Westport had agreed to give the lender ownership rather than going through foreclosure. Ownership transferred in September.

Defaulted

The 410

Address: 410 17th St.

Year Built: 1977

410 17th St. tower

The 410 in 2019 (BusinessDen file)

Square Footage: 435,000 

Owner: RREF III-P 410 17th St LLC, a joint venture between Rialto Capital Management and Steelwave

Lender: Affiliate of Ares Commercial Real Estate

Situation: In foreclosure

The owner paid $127.25 million for the 24-story tower in June 2019 and took out a $113.05 million loan at the same time, records show. The maturity date on the loan was Jan. 5, 2023, with a possible extension to 2025.

The building’s lender initiated foreclosure proceedings in July 2023, saying the owner had defaulted on the loan due to “the failure to make timely payments of principal and interest when due.” The lender said it’s still owed $96.18 million on the original loan.

As of August, the building was 37 percent leased, according to CoStar, with 12 percent of that described as “available,” meaning the current tenant is expected to move out. The building lost a major tenant earlier this year when the law firm Brownstein Hyatt Farber Schreck, which leased 130,000 square feet, moved to 675 15th St.

1670 Broadway

Address: 1670 Broadway

PB214099

1670 Broadway in 2023 (BusinessDen file)

Year Built: 1980

Square Footage:

Owner: HFI 1670 Bdwy LLC

Situation: In special servicing

The owner paid $238 million for the tower in 2018, records show, financing the deal with a $78 million loan from the seller. In September 2023, the owner defaulted on that loan when it failed to pay it off upon maturity. The loan was transferred to special servicing shortly before the default, in August 2023.

1801 Broadway

Address: 1801 Broadway, Denver

Year Built: 1981

1801 Broadway

1801 Broadway in 2019 (BusinessDen file)

Square Footage: 198,000

Owner: Expansive, a Chicago-based coworking firm

Lender: Loancore Capital

Situation: In receivership

The owner, at the time known as Novel Coworking, paid $40.2 million for the 17-story office building in April 2019, financing the deal with a $35.4 million loan.

In an August 2023 lawsuit, the lender said the loan matured in April 2023 and had not been paid off. It said Expansive owed $34.6 million and that it intended to foreclose. A receiver was appointed.

Wells Fargo Center

Address: 1700 Lincoln St., Denver

Year Built: 1983

wells fargo center

Wells Fargo Center in 2019 (BusinessDen file)

Square Footage: 1.2 million square feet

Owner: New York-based Brookfield Properties

Lender: Affiliate of Morgan Stanley

Situation: In receivership

The owner defaulted on the building’s loan when they failed to pay it off upon maturity in December 2022. The loan was then sent to special servicing.

In August 2023, a receiver was appointed to oversee the property at the lender’s request. The move followed a string of negative leasing news for the building; Wells Fargo and WeWork each said they are or intend to drop three of their floors.

Writer Square

Address: 1512 Larimer St., Denver

Year Built: 1980

Square Footage: 186,000

Owner: Kroenke Sports & Entertainment

Lender: Goldman Sachs

Situation: In special servicing

The owner paid $96 million for the property in late 2016.

Trepp, a firm that tracks commercial real estate loans, said in August 2023 comments that the property’s $59 million loan “transferred due to non-compliance with cash management. A PNL was executed in October 2022 and discussions with Borrower are ongoing on a resolution. Special Servicer is currently assessing its next steps and monitoring property performance.”

Columbine Place

Address: 216 16th St., Denver

Year Built: 1981

PB084021 Cropped

Columbine Place in 2023 (BusinessDen file)

Square Footage: 150,000

Owner: Columbine West LLC

Lender: SG Americas Securities

Situation: In special servicing

According to Trepp, the building’s $15.5 million loan will mature in October 2025. The loan transferred to special servicing in October 2022, according to Trepp, which said in a note in August 2023 that the owner and lender are “finalizing terms for a friendly foreclosure” or deed in lieu of foreclosure. The building’s occupancy has fallen from 96 percent in 2015 to 47 percent in July 2022.

In November, a receiver was appointed to oversee the building at the request of an affiliate of Rialto Capital, which has been assigned the loan.

Industry Denver

Address: 3001 Brighton Blvd., Denver

P5280621

Industry Denver at 3001 Brighton Blvd. (BusinessDen file)

Year Built: Adaptive reuse and new construction in mid-2010s

Square Footage: 150,000 

Owner: Clarion Partners and Q Factor, operating as 3001 Brighton LLC

Lender: Affiliates of AIG

Situation: In receivership

The owner defaulted on two loans issued in 2016 by failing to pay them off by their maturity date of Nov. 1, 2023. A receiver was appointed at the lender’s request on Dec. 6, 2023.

Meridian One

Address: 9785 Maroon Circle, Douglas County

9785

The Meridian One office building at 9785 Maroon Circle in Douglas County. (Google Street View)

Year built: 1984

Square footage: 140,000 square feet

Owner: Portland, Oregon-based Felton Properties

Situation: In receivership

The owner paid $12.8 million in 2014. In December 2019, Societe Generale issued a $16.4 million loan secured by the property. The owner defaulted on the loan in multiple ways by August 2023, including failing to make the July principal and interest payment, according to a lawsuit filed by the lender’s trustee. A receiver was appointed.

No longer in default

Republic Plaza

Address: 370 17th St., Denver

Year Built: 1984

Republic Plaza

Republic Plaza in 2021 (BusinessDen file)

Square Footage: 1.3 million square feet

Owner: New York-based Brookfield Properties and Metlife Investment Management

Situation: Emerged from special servicing

The 56-story tower is Denver’s tallest building. The owner defaulted on its $243 million loan in December 2022 when it failed to pay it off upon maturity. The loan was sent to special servicing.

In July 2023, the owner said it had reached a loan modification deal with the lender that included extending the terms of the loan through March 2026. The move followed a couple wins on the leasing front, most notably a 74,000-square-foot lease deal struck with the city for the Denver District Attorney’s Office.

When was this story last updated?

Dec. 13: Added entry about Meridian One building; reorganized entries

Dec. 11: Updated Triad Office Complex entry to note foreclosure sale

Dec. 6: Added entry about Industry Denver at 3001 Brighton Blvd.

Nov. 26: Added entry about 1670 Broadway

Nov. 8: Added reference to appointment of receiver for Columbine Place



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