Columbus offices placed in receivership

March 6, 2009 Business First of Columbus - by Brian R. Ball

A six-building office campus in northeast Columbus has ended up in receivership after lender Bank of America foreclosed on the 200,000-square-foot complex.

Franklin County Common Pleas Court Judge Michael Holbrook appointed Gryphon Asset Management LLC on March 2 as receiver for the Northeast Business Center properties. In its Feb. 27 lawsuit, Bank of America accused an affiliate of Chicago-based Rushmore Properties LLC of failing to pay $37,835 in interest payments due Jan. 1 on two loans with an outstanding balance of $9.42 million.

The landlord bought the Corporate Drive portfolio in June 2006 for $9.7 million, according to public records.

Gryphon President Rich Kruse said initial plans call for examining the property's condition and its leasing history before developing a leasing and asset disposal strategy.

"At this point, what that strategy will be is undetermined," Kruse said. "We have to get the lay of the land."

Rushmore bought the property from lender Wrightwood Capital, which had taken control from ARFO Northeast LLC in November 2005 in lieu of foreclosure. ARFO had paid $12.7 million for the properties in December 1998, according to public records. Rushmore financed the acquisition through LaSalle Bank, which Bank of America has since purchased.

A Rushmore representative could not be reached for comment. Holbrook's order said the investor's attorneys did not oppose the appointment of a receiver.

A search of the LoopNet Inc. real estate database shows the property owner had put four of the buildings on the market for $8 million through the Chicago office of the Grubb & Ellis Co. brokerage. Public records also show three of the six properties have mechanic's liens totaling $186,000 for maintenance and other improvements.

Kruse said a CB Richard Ellis Group Inc. leasing team has some prospective tenants, but signing those clients likely will mean spending cash for tenant improvements.