A former West End office building converted to apartments three years ago has a buyer on the hook, while at the same time a lender has threatened it with foreclosure.
The Argon Apartments building at 3805 Cutshaw Ave. is under contract to be sold, said principal Chris Harrison of Bethesda, Maryland-based C.A. Harrison Cos., which redeveloped the building into 66 apartments in 2014 with financing assistance from the Virginia Housing Development Authority.
The 1960s-era building also is scheduled for a foreclosure sale May 25 on the steps of the city courthouse. A notice by substitute trustee Stephen Wood of The Wood Law Firm states the auction is due to a default on a debt payment totaling $400,000.
Harrison said the default resulted from the sale process, which he expects to wrap up by late June. He said the debt owed on the property’s deed of trust will be paid before the May 25 auction can be held.
“We’re going to settle that debt by the 24th,” he said. “There was a second trust that was placed on the property, and things got a little screwed up because we’re going through a sale, so the lien holder wants their lien satisfied. So we’re just going to go ahead and settle it up.”
C.A. Harrison purchased the five-story, 66,500-square-foot building in 2014 for $2.76 million from Daniel Building LLC, which had owned it since 2002.
Following a 2011 fire that damaged the building’s interior, C.A. Harrison converted it to apartments with $6.5 million in financing from the VHDA. The $7.5 million project included $1 million in required equity, according to the company’s website.
The 1.3-acre property was listed for sale several months ago by Chris Chadwick of Marcus & Millichap with an asking price of $10.5 million. Chadwick confirmed Monday the property is under contract.
Harrison would not disclose the purchaser or purchase price. Chadwick said the buyer is out-of-market.
Harrison said he is selling the apartments to “move on to other developments.” He said their performance in the market was not a factor in the decision.
The 66 apartments include one-, two- and three-bedroom units ranging from 560 to 1,200 square feet. Monthly rents range from $955 to $1,655.
Argon is managed by Arlington-based Bonaventure Realty Group, which also manages the 2001 East apartments in Shockoe Bottom, Southside’s Rockwood Park apartments and Henrico’s Carriage Hill apartments, which it is expanding.
Should the auction go forward on May 25, it is scheduled for 2 p.m. at the entrance to Richmond Circuit Court.