Lender owed $9 million foreclosing on Colfax office building, development site

A property along East Colfax that has been the subject of recent litigation is now in foreclosure.

Greenwood Village-based Lead Funding initiated the foreclosure process on 1245 E. Colfax Ave. in March.

The property is a corner lot that includes a four-story office building and a large parking lot behind it. It is owned by an LLC managed by Leon Cisneros of CRE Development Investments.

Cisneros purchased the Colfax property in 2022 for $9.3 million, financing the deal with an $8 million loan from Lead Funding, according to public records.

Cisneros has proposed building a five-story apartment complex on the parking lot behind the office building, which would also be fixed up.

He was ordered last month to pay $183,000 to Denver’s Oz Architecture for their work on the project after the firm sued him.

Lead Funding’s loan was originally set to mature — be paid off, in other words — in August of last year, according to the lender. The maturity date was extended to the end of February, but that date passed without payoff.

With late fees and interest tacked on, Cisneros now owes about $8.8 million, according to the lender. An auction for the property has been set for Aug. 1.

“The foreclosure was filed due a payoff discrepancy between the 1st position lender — Lead, and the 2nd position lender — Trez. This issue will be resolved in the next few weeks and the foreclosure will be rescinded,” Cisneros said in an email.

The other lender Cisneros mentioned is Trez Capital. In addition to assisting the financing at 1245 E. Colfax, the firm provided capital to another Cisneros property at 1275 N. Santa Fe Drive. Last month, Cisneros told Businessden via email he was going through “debt restructuring” on that property, where his firm built an eight-story, 115-unit apartment complex. That building is 77% leased, the developer added.

Cisneros is also engaged in a legal battle related to unpaid construction costs on the building, which was issued a temporary certificate of occupancy at the beginning of February.

“My attorney has filed counterclaims to this lawsuit. We feel we have a strong position and are working through the process of settlement negotiations,” Cisneros said.

Cisneros also developed the Sloan’s Lake Flats apartment building at 4601 W. Colfax Ave. in 2016 and another apartment building at 1225 Santa Fe Drive.