DTC landlord defaults on loan amid ‘beyond bad’ local office market
A Denver Tech Center Office Complex Placed into Receivership Following Loan Default
A small office complex in the Denver Tech Center has been placed into receivership following a loan default, and its owner expects the lender to take the building.
Pat Melton, director of leasing for the Canadian firm Melcor, expressed frustration with the Colorado office market, calling it “beyond bad.”
In 2016, Melcor purchased The Offices at the Promenade for $16.85 million. The 132,000-square-foot complex, located at 7935 and 7995 E. Prentice Ave. in Greenwood Village, faced financial challenges when the company failed to pay off a $10.6 million loan from Genworth Life Insurance Co. by the required deadline.
GLIC Real Estate Holding, a Genworth subsidiary, revealed that Melcor owed $9 million on the loan as of Jan. 28, with interest accumulating at a default rate of 9.9% annually.
Following a lawsuit filed by GLIC, Trigild IVL LLC was appointed as receiver to oversee the property by Arapahoe County District Judge Joseph Riley Whitfield.
Melton highlighted the stark contrast between the Denver and Phoenix office markets, stating that leasing demand has decreased significantly in Colorado.
Despite efforts to negotiate with the lender, Melcor ultimately conceded and expressed concern about the potential loss of the Syracuse Hill building in Greenwood Village.
With a bleak outlook on the Denver office market, Melcor is considering relinquishing its properties in the area.
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