Three commercial spaces in the Paragon building on the Hyman Mall fetched $5.925 million at a foreclosure sale on the Pitkin County courthouse steps Wednesday morning.
The sole and winning bidder was an LLC set up by Torchlight Loan Services of New York, a national manager of distressed commercial loans, which acquired the deed of trust last week from US Bank National Association, which in turn held the debt through the foreclosure process from the original lender, Deutsche Bank.
Records show that the total debt on the properties was more than $6.6 million. (The outstanding principal is $5.8 million, plus interest and other fees.)
Michigan businessman Linden Nelson, through his Slam Commercial LLC, bought the properties in May 2005 for a total of $6 million. They include a prime, 1,700-square-foot street-level retail space that’s been vacant since the Ritz-Carlton sales gallery moved out in December 2006, as well as two large basement spaces, totaling 5,750 square feet.
Nelson, who sold a penthouse in the Paragon building for $12.95 million in September, also owns the empty Crystal Palace building through another LLC.
Commercial broker Karen Setterfield said she gets several inquiries each month on the street-level space, one of the few remaining empty retail spaces in downtown Aspen. But she hasn’t been able to successfully work with Nelson, the previous owner, to lease it.
The bank placed the properties in foreclosure in June 2012, and a foreclosure sale originally scheduled for October 2012 was postponed multiple times.
The bank attempted to sell the debt on the Paragon spaces via an online auction in mid-February. But the unpublished reserve price was not met, and the bank declined to drop its price to the highest bid. According to a source, the high bid was $4.9 million.
There have also apparently been two offers on the property for $5.5 million since the auction, but both were declined.
According to Setterfield, a local attorney for Torchlight was authorized to bid higher than its initial bid of $5.925 million if there had been other bidders. That the property went for that much, she said, “kind of confirms the strength of our market.”
The properties will actually transfer to the winning bidder after eight business days if no junior liens are filed during that time.
Leave a Reply