Colonnade's mortgage holder buys most of it for $4.2 million Foreclosure auction follows default

September 14, 1993|By Timothy J. Mullaney | Timothy J. Mullaney,Staff Writer

The Washington company that owns the mortgage on the Colonnade hotel and condominium bought most of the complex at a foreclosure auction yesterday for $4.2 million. Only three of the building's nine remaining condominiums sold to third-party buyers.

The complex was put up for auction after a partnership led by developer Richard Rymland defaulted on a $16 million mortgage on the West University Parkway property in Baltimore. Marine Midland Bank of Buffalo, N.Y., sold the loan to an affiliate of Washington-based Bresler & Reiner Inc., a real estate development company, for $10 million.

Bresler & Reiner completed the transaction yesterday by taking control of the complex, which includes the four-star Doubletree Inn at the Colonnade and the space that houses the Polo Grill. The restaurant itself wasn't part of the auction.

Three condominiums sold yesterday for prices ranging from $105,000 to $120,000. The original asking prices for the Colonnade's 119 condos ran from $130,000 to $1.3 million; units similar to those auctioned have been for sale this year for between $135,000 and $150,000.

Mr. Rymland said yesterday that he will stay on after the sale closes to oversee management of the hotel and to help sell the six remaining condominiums. He declined to say whether he owns any part of the Bresler & Reiner affiliate that now controls the Colonnade.

The auction was cleared Aug. 20, when a U.S. Bankruptcy Court judge rejected pleas from Tiber Construction Co. and other contractors who did work at the Colonnade to stop the foreclosure.

Tiber had forced Colonnade L.P. into bankruptcy in hopes that the court would fashion a liquidation plan, making assets available to pay unsecured creditors who stand to lose their claims to about $4 million in unpaid bills. Normally, unsecured claims get paid after a real estate auction only if the auction yields more money than is needed to pay off secured creditors, such as a mortgage holder.

Bresler & Reiner and Mr. Rymland have already had a business relationship. Tiber attorney Steven Johnson said previously that Bresler & Reiner was a co-guarantor on Colonnade's loan from Marine Midland.

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