Westgate office building in foreclosure

by Rebekah L. Sanders The Arizona Republic Jul. 26, 2010 05:14 PM

A Westgate City Center office building that has sat vacant for a year and a half in Glendale is facing foreclosure.

A notice of trustee sale was issued recently for the 40,000-square-foot building at 91st Avenue and Coyotes Boulevard.

Developers at the Ellman Cos. built the offices through a subsidiary, Westgate Garden Office I LLC, next to the company's outdoor shopping center and condominiums that surround University of Phoenix Stadium and Jobing.com Arena.

It is the second notice of trustee sale this month on a high-profile office project in Glendale's sports-and-entertainment district.

The Bidwill family, which owns the Arizona Cardinals, is fending off foreclosure on vacant land near the stadium that was slated to become an office tower, organic farm and townhomes called cbd101.

The down real-estate economy hampered the Ellman Companies' ability to attract tenants, Executive Vice President Tim Wright said in a statement.

"We continue to work with our lenders to determine the best possible outcome for the property," he said.

He added that Westgate would not be affected because Ellman projects are operated, managed and financed independently.

Another Ellman subsidiary, Goldfield Preserve Development LLC, defaulted in May on a $177.1 million loan for 2,450 acres east of Fountain Hills where 1,000 luxury homes and a resort were planned.

Ellman Cos., according to the statement, is raising capital to purchase distressed and undervalued real-estate assets in Arizona and elsewhere.

Representatives would not comment further.

Pete Bolton, who heads the Grubb & Ellis real-estate firm in Phoenix, said developers sometimes let a property go into foreclosure with plans to buy back the real estate, now undervalued by the economic downturn, at a lower amount at the trustee sale. Doing so reduces the developer's monthly loan payments.

Records show the Westgate property's assessed value jumped after the offices were built in November 2008 but fell dramatically from $6.2 million last year to $4.4 million this year.

The original loan amount, date of trustee sale and names of the trustee and lender were not immediately known.



Westgate office building in foreclosure