An 11-story office tower in the heart of the Central Business District could be headed for auction after the loss of some major tenants and after its owners defaulted on a bank loan.
U.S. Bank National Association earlier this year filed to foreclose on the Courthouse Plaza building at 10 N. Ludlow St., located in the southwest corner of Courthouse Square.
The bank initiated the legal proceedings after the building’s ownership group, Courthouse Properties LLC, failed to make payment on a $6 million leasehold mortgage.
The Courthouse Plaza building is almost half empty after some large tenants moved out or reduced their workplace footprints, including a couple of well-known law firms.
“Our space needed work,” said Jeff Ireland, a partner with Faruki Ireland & Cox, which moved out of the plaza building recently after 25 years. “It was well designed for when our firm started, but the space for law firms today is quite different.”
Courthouse Plaza opened around 1976 and was renovated in 2002, according to online listings.
In April, U.S. Bank filed to foreclose on the Courthouse Plaza building after Courthouse Properties failed to make payment on a $6 million loan.
Earlier this month, Montgomery County Judge Gregory Singer issued a judgment against Courthouse Properties in the amount of $5.4 million with interest.
The court authorized selling the plaza building at a sheriff’s sale, if U.S. Bank chooses to proceed with foreclosure.
The lender has other options, which includes selling its note and judgment.
The city of Dayton owns the land. But the property — the office tower — has been leased since the mid-1970s.
Courthouse Properties had an agreement to pay the city $9,375 quarterly, according to a report from a court-appointed receiver.
Courthouse Properties received rents from tenants that included Huntington National Bank, Faruki Ireland & Cox, Dinsmore & Shohl, the General Services Administration, Miami Valley Regional Planning Committee and several other organizations and businesses.
The building, however, is about 53 percent occupied.
The vice president of Courthouse Properties is Frederick Caspar, who is the office managing partner of Dinsmore, according to loan documents.
Dinsmore is a large firm that specializes in business law such as real estate, intellectual property, patents and product liability.
Dinsmore has leased space in the Courthouse Plaza building since at least the late 1980s.
But last summer, the firm unveiled a newly expanded office location at 1 S. Main St. in Fifth Third Center.
Dinsmore said it was combining its Dayton offices and signed a 10-year lease and committed to investing about $8 million into its new home.
Faruki Ireland & Cox, which was in the plaza building since 1990, announced last year it was moving its offices into the Premier Health building at 11o N. Main St. The firm moved out on Jan. 1.
Also, Huntington Bank in 2013 closed its downtown retail branch office in the plaza building, though it retained its offices for wealth management, private banking and commercial banking.
Some downtown office towers have struggled to attract and keep tenants as their buildings age and new product is constructed in other areas.
The city of Dayton has tried to keep businesses from moving out by contributing tens of thousands of dollars to help them renovate downtown office spaces.
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