Lender Cleared to Foreclose on Denver Tech Center Office Tower
A U.S. Bankruptcy Court judge has cleared the path for a lender to take possession of a 145,000-square-foot office building in the Denver Tech Center, marking another significant milestone in the city’s ongoing commercial real estate distress. Judge Thomas McNamara issued a ruling last week granting relief of stay to Wilmington Trust, effectively ending the bankruptcy protection that had shielded the property at 7800 E. Orchard Road from foreclosure.
The decision comes after a prolonged financial struggle for the building’s owner, an affiliate of Denver-based Toma West. According to The Denver Post, the owner, Orchard Falls Operating Company LLC, had sought to reorganize its debts under Chapter 11 bankruptcy in September 2025. This filing occurred just days before another property managed by the firm in downtown Denver entered similar proceedings.
The financial backdrop for the property is stark. Orchard Falls Operating Company LLC originally purchased the site for $25.8 million in April 2014, backed by a $19 million loan. By October 2024, Wilmington Trust initiated foreclosure proceedings, citing an outstanding principal balance of $16.3 million.
Court Rejects Reorganization Plan Due to Feasibility Concerns
Judge McNamara’s ruling hinged on the viability of the owner’s proposed reorganization plan, which sought to pay the lender over a 15-year term, ending with an $8.6 million balloon payment. The court rejected the proposal, characterizing it as failing on “feasibility grounds.”
In his written assessment, Judge McNamara noted that the building, now estimated to be worth approximately $7.2 million, faces an uphill battle. The court observed that current projections suggest the entity would continue to operate at a loss. Addressing the broader climate, the judge identified Denver as one of the most challenging markets in the country for office landlords.
The ruling highlighted specific operational hurdles:
- The debtor’s projections lacked the necessary capital to cover essential expenditures.
- Funds were insufficient to provide the incentives required to retain current tenants or attract new ones.
Building Remains Operational with High Occupancy Rates
Despite the legal transition, the building remains operational. It currently generates roughly $259,000 in monthly rent, with only 17,000 square feet of the 145,000-square-foot footprint sitting unoccupied. The largest tenant, National Bank Holdings Corp., occupies 47,000 square feet of that space. Their lease is currently slated to run until October 2027.
The foreclosure of the Orchard Road property follows a similar judicial outcome in June 2024, when a different judge permitted the foreclosure of 700 17th Street in downtown Denver. While these two sites represent prominent examples of distress, they remain the only major Denver-area office buildings to have sought bankruptcy protection despite widespread financial pressure in the commercial sector.
Toma West founder and president Kenneth Grant did not respond to requests for comment regarding the ruling. The case was argued by attorney Craig K. Schuenemann of Kilpatrick Townsend & Stockton on behalf of Wilmington Trust, while Jeffrey Weinman and Justin Mertz of Michael Best & Friedrich represented the building owner.
