Block-Sized Pasadena Office Property Reverts To Lender

The Pasarroyo Complex At 251 S. Lake.

There were no bidders beyond the opening offer at the Wednesday public auction for Coretrust Capital Partners' Pasarroyo office building at 251 S. Lake Ave., sending the full-block property to the care of its lender, Chicago-based Heitman.

The opening bid for the property was $114M, about 42% of the $271M Heitman is owed on the property and about 45% of what Coretrust paid for it in 2018.

The 640K SF property is the largest office complex in Pasadena.

Heitman's plans for the property are unclear. Representatives for Heitman didn't respond to Bisnow's requests for comment Wednesday.

Foreclosure professionals working on multimillion-dollar properties like this said it is common for big-ticket sites not to receive bids at auction. Unlike probate auctions, which require bidders to bring cashier's checks for a portion of the sale price, qualified bidders at a foreclosure auction must bring a cashier's check for the full amount of the sale.

It is more common for an interested buyer to reach out to the lender directly and negotiate outside of the auction proceedings, sources said. A successful negotiation could mean the property wouldn't ultimately go to auction.

Office foreclosures accounted for nearly half of all commercial foreclosures nationally this year, according to a November report from MSCI.

Pasadena's office availability was 29.8% in the third quarter, above Los Angeles' overall availability rate of 26.5%, according to a report from Savills.

CORRECTION, JAN. 11, 12:30 P.M. PT: This story has been updated to clarify the language around what could happen as a result of an interested buyer pursuing a property outside of the auction process. 

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