Downtown Hartford landlord Northland Investment Corp.’s drawn out foreclosure case involving its City Place II office tower is coming to a head.
A Hartford judge has given the building’s owner until Jan. 17 to pay off the $32 million mortgage or hand over the keys, court documents show.
Judge Susan A. Peck has ordered the 18-story tower into strict foreclosure, a type of legal action taken against delinquent borrowers’ whose debt is greater than the value of their property, papers show.
The building at 185 Asylum St. has been tied up in a legal struggle for nearly two years, after Northland defaulted on a $25 million mortgage on the property in 2009.
Northland has said it has had difficulty refinancing the mortgage, which was securitized and sold to a group of investors.
The Massachusetts-based landord did not immediately return a call Thursday for comment.
According to court documents, City Place II is well under water. Northland owes more than two times the fair market value of the property, which was recently appraised at $12.8 million. That would make it very difficult to get increasingly risk averse lenders to refinance the debt.
If Northland does lose the property, it would represent the latest blow to the company’s commercial real estate empire in Hartford.
Northland has already lost one of its downtown holdings, the 12-story Metro Center at 350 Church St., to foreclosure. Another one of its Hartford properties, the iconic Goodwin Square office tower is also in foreclosure.
If the City Place II case is resolved next month it could also have implications on the sale of its sister building, City Place I, which is owned by a separate limited partnership.
City Place I, a 39-story Class A office tower that is nearly fully leased, has been on the sales block since June.
Real estate sources say a combined sale of City Place I and II to a single buyer could make it a more attractive asset. But attempting to strike that deal has been difficult with City Place II being tied up in a foreclosure case.
