The 700 17th St. tower was built in 1960. (Thomas Gounley/BusinessDen)
Add 700 17th St. to the list of downtown Denver office towers in default.
An affiliate of Denver-based Toma West, which owns the building, has failed to make payments on time on the $21 million loan it took out in 2016, according to a report from Trepp, which tracks commercial real estate loans.
The loan was transferred to special servicing in March, according to Trepp, whose report states the owner was more than 90 days delinquent on payments as of last month.
The tower’s loan is one of a number downtown known to have defaulted.
Public records show Toma West’s 700 17th Street LLC paid $32 million for the property in June 2016, although Toma West had also been affiliated with the previous LLC that bought it in 2006. The $21 million loan that financed the 2016 deal came from New York-based Benefit Street Partners.
That loan was for 10 years, set to expire in June 2026, according to the loan documents, which Toma West President Kenneth Grant signed. About $18.1 million is still owed on the loan, according to Trepp.
Richard Herold, vice president and general manager of Toma West, told BusinessDen last week that the firm has an “amicable” relationship with its lender and “We’ll keep the building.”
Herold noted the broader challenges downtown, including the ongoing and slower-than-expected renovations along the 16th Street Mall, which have prompted retail closures and made traveling by foot convoluted.
“It has killed everybody,” he said. “We’re just one of 100.”
The tower is 182,500 square feet, according to its website. It was built in 1960 and most recently renovated in 2017. For a time, it was known as United Western Financial Center, after tenant United Western Bank. The bank failed in 2011 and Federal Deposit Insurance Corp., or FDIC, took it over. Current tenants include Transact Bank, formerly known as Colorado National Bank.
The property was 90 percent occupied at underwriting. Occupancy dipped prior to the pandemic, then dropped steadily. The building was 88.5 percent occupied at the end of 2018, and 78 percent in 2019, according to Trepp. That fell further to 72, 60 and 50 percent, respectively, at the end of 2020, 2021 and 2022, per the report.
Transact Bank, formerly known as Colorado National Bank, operates in the building. (Thomas Gounley/BusinessDen)
Herold said the tower’s occupancy is now in the “low 60s,” and a full floor lease was signed recently. That lease is for just under 7,000 square feet, as the tower is relatively slender.
Herold sees small floor plates as an advantage when there are few large tenants hunting for space.
‘We’re, I think, in a little better position than a lot of other buildings because of our location and floor plates,” he said.
Special servicers are essentially negotiators brought in when a lender gets concerned about an asset, either because the owner has defaulted or because of some other factor, such as the loss of a major tenant. Speaking to BusinessDen last year, a Trepp executive likened special servicing to a sort of “purgatory,” which could lead to foreclosure but also potentially to an alternative resolution.
At 357 feet, 700 17th is the 30th-tallest building in Denver.
Read more: Troubled towers: Breaking down Denver’s distressed office properties
The 700 17th St. tower was built in 1960. (Thomas Gounley/BusinessDen)
Add 700 17th St. to the list of downtown Denver office towers in default.
An affiliate of Denver-based Toma West, which owns the building, has failed to make payments on time on the $21 million loan it took out in 2016, according to a report from Trepp, which tracks commercial real estate loans.
The loan was transferred to special servicing in March, according to Trepp, whose report states the owner was more than 90 days delinquent on payments as of last month.
The tower’s loan is one of a number downtown known to have defaulted.
Public records show Toma West’s 700 17th Street LLC paid $32 million for the property in June 2016, although Toma West had also been affiliated with the previous LLC that bought it in 2006. The $21 million loan that financed the 2016 deal came from New York-based Benefit Street Partners.
That loan was for 10 years, set to expire in June 2026, according to the loan documents, which Toma West President Kenneth Grant signed. About $18.1 million is still owed on the loan, according to Trepp.
Richard Herold, vice president and general manager of Toma West, told BusinessDen last week that the firm has an “amicable” relationship with its lender and “We’ll keep the building.”
Herold noted the broader challenges downtown, including the ongoing and slower-than-expected renovations along the 16th Street Mall, which have prompted retail closures and made traveling by foot convoluted.
“It has killed everybody,” he said. “We’re just one of 100.”
The tower is 182,500 square feet, according to its website. It was built in 1960 and most recently renovated in 2017. For a time, it was known as United Western Financial Center, after tenant United Western Bank. The bank failed in 2011 and Federal Deposit Insurance Corp., or FDIC, took it over. Current tenants include Transact Bank, formerly known as Colorado National Bank.
The property was 90 percent occupied at underwriting. Occupancy dipped prior to the pandemic, then dropped steadily. The building was 88.5 percent occupied at the end of 2018, and 78 percent in 2019, according to Trepp. That fell further to 72, 60 and 50 percent, respectively, at the end of 2020, 2021 and 2022, per the report.
Transact Bank, formerly known as Colorado National Bank, operates in the building. (Thomas Gounley/BusinessDen)
Herold said the tower’s occupancy is now in the “low 60s,” and a full floor lease was signed recently. That lease is for just under 7,000 square feet, as the tower is relatively slender.
Herold sees small floor plates as an advantage when there are few large tenants hunting for space.
‘We’re, I think, in a little better position than a lot of other buildings because of our location and floor plates,” he said.
Special servicers are essentially negotiators brought in when a lender gets concerned about an asset, either because the owner has defaulted or because of some other factor, such as the loss of a major tenant. Speaking to BusinessDen last year, a Trepp executive likened special servicing to a sort of “purgatory,” which could lead to foreclosure but also potentially to an alternative resolution.
At 357 feet, 700 17th is the 30th-tallest building in Denver.
Read more: Troubled towers: Breaking down Denver’s distressed office properties
