Landmark downtown building falls into foreclosure

One of Colorado Springs’ most prominent downtown office buildings, which sits at a high-profile intersection that’s been a center of banking activity for more than a century, has fallen into foreclosure.

The building on the northwest corner of Pikes Peak Avenue and Tejon Street has been known in recent years as the Chase Bank Building, Bank One Building and First National Bank Building — depending on who occupied it at any given time.

A foreclosure notice was filed Tuesday against NNN 6 Tejon Street LLC and NNN Pikes Peak & Tejon LLC, which are controlled by a California investment partnership that bought the building in 1999, according to El Paso County Public Trustee’s Office and Assessor’s Office records.

The partnership has an unpaid principal balance of $7 million on a loan of $8 million, records show. Bank of America is the current holder of the loan; a foreclosure auction has been set for Dec. 15. The building had been listed for sale for  $7.26 million, according to Turner Commercial Research of Colorado Springs.

The foreclosure filing is the start of a process that could result in the owners losing the property. As the process plays out, the building’s tenants likely will continue to operate as before.

Still, the foreclosure is another sign of the woeful commercial real estate industry. When employers go out of business or downsize, or as retailers close or consolidate, they abandon commercial space. The Pikes Peak region’s combined vacancy rate for offices, industrial buildings and shopping centers was 12.8 percent in the second quarter; a decade ago, it was 5 percent, according to Turner Commercial Research.

Building owners lose income when tenants leave. And when owners try to extend or refinance loans used to buy the property, they’re often rejected and foreclosures loom.

The Pikes Peak and Tejon building has 100,000 square feet above ground and additional space in a lower level, said broker Andy Oyler of Grubb & Ellis/Quantum Commercial Group. About 44,000 of the 100,000 square feet is available for lease, he said.

A big chunk of space became vacant when Chase moved out in 2009 and consolidated operations with another location. Remaining tenants include the Vladimir Jones advertising and public relations agency and the Melting Pot restaurant.

A bank first opened on the corner in 1873, two years after the city was founded, according to Gazette archives. First National Bank had its first location on the site in 1874. The current building on the site was constructed in 1956.

It was gutted and reopened in 1988 as part of a multi-million dollar renovation; the existing building is composed of a five-story structure at 6 N. Tejon and a two-story structure at 30 E. Pikes Peak.

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