The four-story office building at 1245 E. Colfax Ave. is seen on Monday, Sept. 25, 2023. (BusinessDen file)
A lender on a proposed East Colfax development gone belly-up is taking matters into its own hands.
Greenwood Village-based Lead Funding took ownership of the small office building at 1245 E. Colfax Ave. in City Park West through a foreclosure auction with an $8.5 million credit bid last month.
On Monday, the lender submitted plans proposing to convert the 46,000-square-foot building for residential use, and build more apartments on the parking lot behind it. The lot is 0.85 acres.
“We’re doing all the entitlements, all the design and it’s our hope to sell it to a developer once the entitlements are done in 16 to 18 months,” said Victor Mitchell, CEO and founder of Lead Funding.
An LLC managed by Leon Cisneros of CRE Development Investments, which purchased the property in 2022 for $9.3 million. previously financed the deal with an $8 million loan from Lead Funding.
Cisneros also planned to build apartments on the property’s parking lot, although his plans call for the office building to be renovated but remain office space.
Lead Funding filed to foreclose on the property in March, saying at the time that Cisneros owed $8.8 million on the loan. Around the same time, he was ordered to pay an architect $183,000 for work on the proposed redevelopment.
“He basically overextended himself. He was doing another project on Santa Fe … he basically ran out of money,” Mitchell told BusinessDen Tuesday, referring to apartment complexes that Cisneros developed at 1225 and 1275 Santa Fe Drive in Denver.
Cisneros did not respond to a request for comment Tuesday.
The building as seen from its parking lot in 2022. (BusinessDen file)
Mitchell said this is the first time his firm has sought to entitle a property before selling it. His proposal calls for crafting 147 apartments out of the “outdated” 1960s office building and a new structure built behind it. All units would be studios under 500 square feet, he said. Centennial-based Godden Sudik Architects drew up the plans.
“It fits the two demographics: young professionals and seniors that are looking for a second home, but they want a place in the city,” Mitchell said.
Approximately 6,000 square feet of retail space in the existing office building would remain, according to the plans. Amenities include a rooftop lounge and fitness center, Mitchell said. There would be 54 parking spaces onsite, mostly covered, although some surface parking would remain.
Before that vision can be realized, Mitchell must first navigate Denver’s permitting process, which he said is “killing developers” and contributing to the city’s “housing crisis.”
“The city should be able to turn this around in six months, and it’s going to take 16 to 18 months,” he said.
In the meantime, the office building, which is 70 percent occupied, will continue to operate normally. The leases for existing tenants there will expire in two years.
“Our core business is mostly fix-and-flip lending, new construction on spec homes and industrial buildings … So this is kind of an outlier project that we have,” Mitchell said.
Mitchell previously founded and owned Essence Homes, but sold that business in 2012. He launched Lead in 2008 amidst the global financial crisis “when there was a lot of need for capital.”
The four-story office building at 1245 E. Colfax Ave. is seen on Monday, Sept. 25, 2023. (BusinessDen file)
A lender on a proposed East Colfax development gone belly-up is taking matters into its own hands.
Greenwood Village-based Lead Funding took ownership of the small office building at 1245 E. Colfax Ave. in City Park West through a foreclosure auction with an $8.5 million credit bid last month.
On Monday, the lender submitted plans proposing to convert the 46,000-square-foot building for residential use, and build more apartments on the parking lot behind it. The lot is 0.85 acres.
“We’re doing all the entitlements, all the design and it’s our hope to sell it to a developer once the entitlements are done in 16 to 18 months,” said Victor Mitchell, CEO and founder of Lead Funding.
An LLC managed by Leon Cisneros of CRE Development Investments, which purchased the property in 2022 for $9.3 million. previously financed the deal with an $8 million loan from Lead Funding.
Cisneros also planned to build apartments on the property’s parking lot, although his plans call for the office building to be renovated but remain office space.
Lead Funding filed to foreclose on the property in March, saying at the time that Cisneros owed $8.8 million on the loan. Around the same time, he was ordered to pay an architect $183,000 for work on the proposed redevelopment.
“He basically overextended himself. He was doing another project on Santa Fe … he basically ran out of money,” Mitchell told BusinessDen Tuesday, referring to apartment complexes that Cisneros developed at 1225 and 1275 Santa Fe Drive in Denver.
Cisneros did not respond to a request for comment Tuesday.
The building as seen from its parking lot in 2022. (BusinessDen file)
Mitchell said this is the first time his firm has sought to entitle a property before selling it. His proposal calls for crafting 147 apartments out of the “outdated” 1960s office building and a new structure built behind it. All units would be studios under 500 square feet, he said. Centennial-based Godden Sudik Architects drew up the plans.
“It fits the two demographics: young professionals and seniors that are looking for a second home, but they want a place in the city,” Mitchell said.
Approximately 6,000 square feet of retail space in the existing office building would remain, according to the plans. Amenities include a rooftop lounge and fitness center, Mitchell said. There would be 54 parking spaces onsite, mostly covered, although some surface parking would remain.
Before that vision can be realized, Mitchell must first navigate Denver’s permitting process, which he said is “killing developers” and contributing to the city’s “housing crisis.”
“The city should be able to turn this around in six months, and it’s going to take 16 to 18 months,” he said.
In the meantime, the office building, which is 70 percent occupied, will continue to operate normally. The leases for existing tenants there will expire in two years.
“Our core business is mostly fix-and-flip lending, new construction on spec homes and industrial buildings … So this is kind of an outlier project that we have,” Mitchell said.
Mitchell previously founded and owned Essence Homes, but sold that business in 2012. He launched Lead in 2008 amidst the global financial crisis “when there was a lot of need for capital.”
