CEDAR FALLS, Iowa --- A developer from Peosta has won the bidding for the former headquarters of defunct Peregrine Financial Group.
A.J. Spiegel, owner of Spiegel Family Realty Co. Iowa LLC, as well as Mi-T-M Corp., a Peosta-based designer and manufacturer of industrial equipment, outbid Los Angeles-based Karlin Real Estate LLC for the 48,250-square-foot office complex and surrounding 22.07 acres in rural Cedar Falls.
The winning bid was $3,255,000.
Michael Eidelman, the court-appointed receiver for bankrupt PFG and its former CEO, Russell Wasendorf Sr., awarded the winning bid Wednesday.
The deal is scheduled to close “in the next few weeks."
Eidelman will submit documents to the bankruptcy court in Chicago, said Michael Bordwin, co-owner of GA Keen Realty Advisors, which conducted the auction as part of PFG’s Chapter 7 bankruptcy liquidation.
Karlin Real Estate, which had submitted a “stalking-horse” bid of $2.75 million in early May, was the only other bidder for the property.
The auction originally had been scheduled for today, but Eidelman said he decided to save time and expense and finish the process up early.
“The bid deadline was last Friday and we had only two bidders, so we reached out to both bidders and to write down their best bids, rather than everyone getting on a plane for Chicago,” Eidelman said Thursday.
“It worked out for everybody. We were happy because purchase price was increased and, from our perspective, was maximized for the benefit of the estate,” he added.
Spiegel, 69, who has been developing residential and commercial real estate largely around the Dubuque area since the 1960s, said he attended PFG’s property auction in December for the express purpose of getting a close look at the property.
He said he loved what he saw.
“I went to the auction and thought, ‘What a great institution for some kind of business and a way to bring some employees back to work in a particular area,’” Spiegel said Thursday.
“I think there‘s a lot of possibilities. It’s a very first-class office operation. I’m fortunate to bid and win the bid, and there is an opportunity for companies in the Cedar Falls and Waterloo area to work some kind of leasing or office for one or two companies, and it would work out well,” he added.
He said he had not approached any local companies about that possibility.
“It’s still a little early in the game,” he said. “I’ll do what I have to do.”
Spiegel said he would conduct a closer evaluation of the building and grounds after the closing.
“The closing would be in mid-June sometime, and from there on, I’ll probably come over and clean it up and do what we’ve got to do,” he said. “I’m looking forward to getting the keys.”
The sale is a major step forward for the local business community, said Steve Dust, CEO of the Greater Cedar Valley Alliance & Chamber.
“It seems to be the final piece of putting last year’s events behind us and opening up new opportunities for new businesses to use an extraordinary space,” Dust said. “We’ll get introduced to this fellow quickly.”
As for covering investor losses in PFG, sale of the building likely would do little, Eidelman said, noting the sale price falls well short of the four-year-old building’s original cost of about $20 million.
“In the language of the day, it was effectively a ‘short sale,’” Eidelman said. “USBank agreed to release its lien but is not getting paid in full.”
Then, there’s a claim put in by the U.S. Internal Revenue Service, which further complicates the status of the estate.
“Much will depend on what happens with the IRS, but I’m holding out hope this is going to be done and closed by this calendar year,” Eidelman said.