In the coming months, Republic Plaza will lose Bank of America and the law firm Morrison Foerster, both of which have leased space elsewhere downtown.
A view of the downtown Denver skyline in 2020. Republic Plaza, the city’s tallest building, is the large tower to the left. Republic Plaza owner Brookfield Properties failed to pay off the downtown office tower’s loan upon maturity this month, according to Trepp, a firm that tracks commercial real estate loans.
The same thing happened in late 2022, when the loan originally matured, or needed to be paid off. The term of the loan was later extended. Building owners with a maturing loan typically refinance into a new loan or sell the building to pay off the original loan. But both of those options have gotten challenging since the pandemic. Office space is less in demand, so lenders are less interested in giving loans for it. And valuations have plummeted, so selling a building often wouldn’t generate enough funds to pay off its prepandemic loan. Republic Plaza, which is 56 stories and 1.3 million square feet, has been owned by New York-based Brookfield since the early 1990s. In 2014, the company sold a 50% stake to insurance firm MetLife. That deal valued the structure at $480 million. The building had a $243 million loan on it, which originally needed to be paid off in December 2022. Brookfield failed to do so. In July 2023, buoyed by a recent deal with the Denver District Attorney’s Office, Brookfield announced that it and its lender had struck a deal. They modified the loan, extending the term through March 15 of this year. According to Trepp, the arrangement allowed for interest-only payments, although Brookfield also had to make a one-time partial principal payment and contribute funds to a reserve. That deal, sometimes derided as “extend and pretend,” was a bet by both sides that the environment around office space, lending and interest rates would be different when that date came. The default again this month is an admission that it remains largely the same. Trepp now refers to the building’s loan as $230.1 million, a figure that could reflect the principal payment in 2023. The loan has been placed into special servicing. Special servicers are essentially negotiators brought in when a lender is concerned about an asset.Beloved Denver outdoor gear store Wilderness Exchange closing its doorsByron Weiss, owner of Rock Drill property in RiNo, dies at 86 Republic Plaza was built in 1982. CoStar shows it as 65% leased. Oil firm Ovintiv is the largest tenant, with more than 200,000 square feet. In the coming months, the building will lose Bank of America and the law firm Morrison Foerster, both of which have leased space elsewhere downtown. Brookfield declined to comment. The real estate giant has had a rough go of it in downtown Denver. Last year, it sold the City Center towers at 707 and 717 17th St. for a $340 million loss. The company also owns the Wells Fargo Center, which has been in receivership since August 2023.Female-focused ski fest, famous for its naked lap, will go on despite no snow for skiingBeloved Denver outdoor gear store Wilderness Exchange closing its doorsDenver Water enacts Stage 1 drought restrictions for the first time since 2013Gov. Jared Polis signs HOME Act, aimed at making it easier for nonprofits to build housing
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