GFH Financial Group to auction depreciating Aurora office building

An Aurora office building that changed hands for $22 million in 2018 is headed for auction with a starting bid of $750,000.

The 140,000 square-foot building at 4245 Meridian Parkway is 41 percent leased, according to the auction listing. 

Bahrain-based GFH Financial Group owns the building, deed records show.

The auction is part of a broader trend of suburban office building owners taking steep losses to offload troubled assets. As pandemic era work from home policies and high interest rates stymie the office market, complexes in the suburbs have been hit particularly hard. Last month, a bargain-hunting firm snapped up a Schaumburg office building for the staggeringly low price of $7 per square foot.

EQT Exeter bought the Aurora office for $16 million in 2017 and stayed on as the property and asset manager after GFH bought it for $22 million in 2018. 

Representatives of EQT Exeter, a Sweden-based company whose U.S. headquarters is in Pennsylvania, declined to comment. GFH Investments did not respond to requests for comment. 

Citizens Bank issued the most recent loan for the property, which was set to expire in April 2022 but had the option to extend until April of this year.

Representatives of Citizens Bank did not respond immediately to requests for comment. 

The auction will run from Jan. 22 to 24. Daniel Deuter and Jeremiah Olsen of Cushman & Wakefield are representing the seller.

Auctions are not a silver bullet for offloading a distressed property.

Two auctions held this summer for lender-owned office properties — one in downtown Chicago, and one in the western suburbs — generated interest but struggled to close quickly.

If a winning bid comes in low, the bondholders that own that debt’s note can refuse to sell off the property, unwilling to stomach such a large loss. In that case, the property remains in the hands of the bondholders in the debt, instead of being transferred to the auction’s highest bidder. 

The bidder isn’t out any money, and the bondholders can re-market the property for sale through auction again or a standard listing at a time they feel they could get a better price.

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