The 98,000 square-foot upscale Plaza Palomino retail and office complex has fallen into default on a $10.7 million loan and has been noticed for foreclosure in September. The seven-building complex on 6.3 acres on the southeast corner of Swan and Fort Lowell roads was built in 1985.

Owners listed on the foreclosure notice are SEC Plaza Palomino LLC and New Rudasill La Cholla LLC, both Tucson. According to public records, members of the ownership group include Don Bourn, David Montijo, Paul Schloss, Alan Tanner, Philip Skillings, and Toufic Abi-Aad of Bourn Partners; ophthalmologist Dr. Stephen Grimm, and podiatrist Dr. Amram Dahukey.

The beneficiary is CCMS 2005-CD1 Swan Road LLC, in care of LNR Partners LLC of Miami Beach, Fla. It is an investment group tied to LNR Partners, a mortgage real estate investment trust that is a subsidiary of LNR Property Corporation. LNR Property was the investment arm of homebuilding giant Lennar that was spun off in 1997.

According to public records, US Bank assigned the note to the investment group in May. The original $10.7 million note was issued in April 2005 by LaSalle Bank, a Chicago-based bank that was acquired by Bank of American in October 2007.

The foreclosure auction is set for 1 p.m. Sept. 23 in the law offices of Ballard Spahr, 1 E. Washington St. Suite 2300, Phoenix.

$1M+ properties on block

Three residential properties with mortgages of more than $1 million each have been noticed for foreclosure auctions.

The home with the highest original principal is $1.4 million on a 3,772 square-foot home on a four-acre parcel at 12000 E. Prince Road. According to public records, it is owned by Beth Anne Laos as trustee of the Laos Family Trust. The beneficiary is World Ranch LLC, 11333 E. Prince Road, owned by the McClellan Family Trust with Rebecca and Jerry McClellan as trustees. The foreclosure auction is set for 10 a.m., Sept. 14 at the Udall Law Firm, 4801 E. Broadway, Suite 400.

In Saguaro Ranch, Marana, luxury Lot No. 41 will go up for auction on a $1.3 million note that was purchased in 2007 by a Jill and George Guzzardo, Ironwood, Mich. The beneficiary is M&I Marshall & Ilsley Bank, Milwaukee, Wis. The sale is set for 11:30 a.m. Sept. 14 on the steps of the Pima County Courts Building, 110 W. Congress St. The law firm handling it is Folks & O'Connor, Phoenix.

And the third property is a 4,834-square-foot custom home on a 1.34 acre lot at 3189 E. Corte de Andalucia off Hacienda Del Sol Road in the Catalina Foothills. The beneficiary on the $1.1 million note is JPMorgan Chase Bank. It was taken out by Rose Andrade. The two-story, four-bedroom home was built in 2002 and has a pool/spa and three garages. California Reconveyance Co. is handling the action, which is also set for 11:30 a.m. Sept. 14 at the Pima County Court Building.

Tucson home prices fall

New statistics from data analyst Core Logic show that while home prices are beginning to stabilize across the country, values in the Tucson region continue to erode. For May, a 13.5 percent decline in prices was recorded for all Tucson home sales compared to May 2010.

When distressed properties (short sales and bank-owned houses) were excluded, year-over-year prices declined 3.56 percent.

Nationally, home prices including distressed sales actually increased 0.8 percent in May compared to April. This marked the second consecutive month-over-month increase. Year-to-year, prices declined 7.4 percent compared to May 2010, according to CoreLogic.

Overall, Arizona recorded the nation's third-largest loss in home values. From May 2010 to May 2011, year-over-year sales prices fell 12 percent. When distressed homes were excluded, prices fell 7 percent.

Sales and leases

Easter Seals Blake Foundation Children and Family Services leased 14,400 square feet at 6420 E. Broadway from EGC Properties LLLP, represented by Rob Fischrup and Jon O'Shea, Vast Real Estate Solutions. Tari Auletta, Grubb & Ellis, represented the tenant.

Urological Associates of Southern Arizona leased 5,734 square feet at 2700 E. Bilby Road, Suite 100, from Innovations Holding Inc., represented by Pat Welchert, Picor Commercial Real Estate Services. Dean Cotlow, Cotlow Company, represented the tenant.

K12 Management leased 4,980 square feet at 4605 S. Palo Verde Road, Suite 605, from Presson Equity Partners. Rob Glaser, Picor Commercial Real Estate Services, handled the transaction.

Goodwill Industries of Southern Arizona leased a 2,410-square-foot building at 6852 E. Tanque Verde Road from Little Revocable Trust. David Blanchette, CB Richard Ellis, represented the tenant.

Southern Arizona Allergy Associates leased 2,359 square feet at 6565 E. Carondelet Drive, Suite 310, from HCP Inc., represented by Tom Knox and Rick Kleiner, Picor Commercial Real Estate Services. Lori Casey, Oxford Realty Advisors, represented the tenant.

Saguaro Conveyor Equipment Inc. leased 2,025 square feet at 6300 E. El Dorado Plaza, Suite B-300, from Mountain Oyster Club. Tom Nieman and Peter Douglas, Picor Commercial Real Estate Services, represented the landlord. David Blanchette, CB Richard Ellis, represented the tenant.

Lambro Fitness LLC leased 1,950 square feet at 8985 E. Tanque Verde Road in Bear Canyon Shopping Center from Bear Canyon Associates LLC, represented by Pete Villaescusa and Jesse Peron, CB Richard Ellis.

Go Green LLC leased 1,950 square feet at 5500 E. 22nd St. in County Fair Shopping Center from MVL Investments LLC represented by Terry Dahlstrom, Volk Company. The tenant was represented by David Dutson, CB Richard Ellis.

Email news items for this column to ryohem@azbiz.com. Inside Real Estate & Construction appears weekly.