Three office buildings in Brookfield’s Bishops Woods business park are being put into the hands of a receiver under a foreclosure lawsuit filed by a lender that alleges the owner stopped making mortgage payments in March.
Those Pinnacle at Bishop’s Woods building have almost 247,200 square feet of combined space and an assessed value approaching $30 million. A foreclosure lawsuit was filed Aug. 29 against the property located north of Interstate 94 at South Sunny Slope Road and Bishops Drive.
The three buildings were constructed between 1999 and 2003 by Big Bend Development LLC of Brookfield. Jay Henrichs of Big Bend Development is among the individuals who provided a guarantee on the property’s mortgage, as did two principals of Peter Schwabe Inc., a construction firm that leases space in one Pinnacle at Bishops Woods building, according to the foreclosure filing.
The lender and owner agreed to have Friedman Real Estate Management take oversight of the properties as their receiver, according statements by their attorneys during a Friday hearing in Waukesha County Circuit Court.
The foreclosure lawsuit filed by the lender anticipates a pickup in office leasing activity after the dampening effect of the Covid-19 pandemic, and argues a receiver could best maintain and manage the buildings to retain, and attract new tenants.
“With the potential reopening of many offices and buildings in the area to occur in the future, the property is likely to experience an uptick in business,” the Aug. 29 foreclosure filing said. “A continued decline in the property’s condition as well as its reputation and goodwill during these times will inevitably impact the property’s tenant occupancy and lease rates in a negative manner.”
Friedman, based in Michigan, in a report noted it is also a receiver involved with the 100 East office tower in downtown Milwaukee that is under foreclosure and to be sold.
The debt on the Pinnacle property belongs to a commercial mortgage fund created by Citigroup in 2014, according to the foreclosure lawsuit. The balance due on the loan as of Aug. 26 was $28.93 million, according to the Aug. 29 court filing. That lawsuit said payments toward the loan stopped in March.
The complaint filed Aug. 29 seeks a judgment in the amount of the unpaid mortgage and court approval for a foreclosure sale of the building.
An attorney representing the property’s ownership in the foreclosure case declined comment. Attorneys who filed the foreclosure lawsuit on behalf of the lender did not respond to requests for comment.
The three buildings had a combined occupancy of 68%, according to the Milwaukee Business Journal’s list of the largest Milwaukee-area office complexes published in July. That compares with 82% occupancy reported for the Milwaukee Business Journal list in summer 2021.
Tenants of the buildings include insurance firm Travelers, data center firm Windstream, DeWitt LLP and TEK Systems.
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