An office building in Uptown could be in receivership by month’s end, a judge warned last week, as its squabbling co-owners struggle to keep it above water ahead of an expected maturity default in July.
“The parties are not communicating effectively, they are not able to agree on decisions regarding the (1640) Grant Street property,” Brad Schacht, an attorney for real estate investor Aviv Rubin, said March 12. “They are trying to sell it. It has essentially been sitting stagnant on the market for months now.”
Plus, taxes have not been paid for 1½ years and its largest lease expires in June.
“If this property has any equity, it is right on the line. It is very close to being underwater, and the parties simply cannot reach an agreement on how to move forward,” Schacht said.
Judge Thomas Henderson gave them 14 days to find a buyer before deciding on a receiver.
“From everything I read — you guys probably keep up on it more than I do — commercial real estate is not a particularly shrewd investment in a lot of people’s minds these days,” Henderson said with a short laugh at the hearing. “But I’m sure there’s deals to be had.”
The building at 1640 Grant St. was purchased for $2.6 million in 2019 by Matt Tambor and Rubin, along with small minority investors. Tambor was a mentor to Rubin, now a principal at DoubleBay Partners, and lent Rubin money for the purchase, Tambor’s lawyer says.
“He trusted Mr. Rubin,” Michael Schlepp said March 12. “But when Mr. Rubin presented to Mr. Tambor that he had been paid back for the loans, that was not actually the case.”
Both men accuse the other of impropriety in their 15 real estate transactions. The result is a 50-50 deadlock at their remaining properties: 1640 Grant and a Colorado Springs building.
“We see this case as an effort, frankly, to bully Mr. Tambor into unnecessary fire sales of real estate assets because he previously denied Mr. Rubin’s demand to buy him out at an unnecessary number,” Schlepp said. “He created a deadlock to force a buyout.
“The property is for sale, it has been for sale,” Tambor’s lawyer noted of the property. “The sale price has been reduced. A receiver would not do anything different to list this.”
Schlepp asked the judge to hold off on appointing a receiver for a few weeks.
“There was a potential buyer who came in this week with an architect and mechanical systems engineers to inspect the property. Frankly, we are optimistic that there is an offer coming in the next couple of weeks, which would be fantastic and solve one of the issues in this case.”
Henderson set a hearing for March 26 and said he expects to decide on a receiver quickly if the property is not sold by then, since a possible summer foreclosure is threatening.
Rubin is asking that Ryan Gulick with the Receiver Group in Denver maintain the building.
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