Auraria Student Lofts: The DST, the 2019 Sale and the Bankruptcy
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Quick Answer
Auraria Student Lofts (1051 14th Street, Denver; 438 beds in 125 units) had two owners from the Nelson sponsor family, and only the second one went bankrupt. In 2014, NB Auraria, DST (CIK 1601802) bought it with a $27,225,000 CMBS loan and offered $12,920,000 of trust interests to 1031 investors, reporting $6,190,245 sold to 25 investors on its last Form D/A (signed July 31, 2014). In December 2019, Nelson Partners announced a sale that it said produced “a 102 percent total return to investors”, buyer undisclosed. The bankruptcy record names the buyer: 5280 Auraria, LLC, whose sole member is Nelson Partners, LLC, owned by Patrick Nelson. It paid about $60 million including costs, financed with $52.0 million of debt (a $46.5 million Cantor loan and a $5.5 million mezzanine loan) and $8.1 million of Nelson Partners equity. The DST's loan shows as fully defeased from the December 2019 servicer report. The new loan matured on December 9, 2021, Fortress bought it, and 5280 Auraria filed Chapter 11 on June 9, 2022 (Bankr. D. Colo. No. 22-12059) to stop a foreclosure sale. On July 19, 2024 the court denied the plan and lifted the stay; Fortress bought the property at a foreclosure sale for a reported $54.8 million on September 5, 2024, and the case was closed on May 14, 2025. As of October 11, 2026.
Key Takeaways
- Two owners, two outcomes. NB Auraria, DST owned the building from 2014 to late 2019; its CMBS loan was defeased when it sold, so the bondholders were no longer exposed. The bankruptcy and foreclosure belong to the 2019 buyer, 5280 Auraria, LLC, not to the DST.
- The 2019 buyer was the sponsor's side. The Disclosure Statement in Case No. 22-12059 says Nelson Partners, LLC is the Member and Manager of 5280 Auraria and Patrick Nelson owns Nelson Partners. Trade press in December 2019 reported the buyer as undisclosed.
- The DST's own load: the Form D/A estimates $1,090,725 of sales commissions and $1,800,000 of offering proceeds paid to the named officers and promoters, together 22.4% of the $12.92 million offering (our arithmetic).
- The 2019 price was paid mostly with borrowed money: $46.5 million senior plus $5.5 million mezzanine against $8.1 million of equity, 86.5% debt (our arithmetic), on a senior loan due in about two years.
- Fortress (through DB Auraria, LLC) became the holder of the senior notes on or about November 5, 2021, filed a claim for $51,112,064.77 and was opposed by the debtor, which alleged predatory conduct that Fortress disputes. We found no ruling upholding those allegations in the documents we could read.
- The sponsor's “102 percent” is a claim about the first owner's exit; nothing public lets anyone check it, and the price that made it possible was set in a sale to a Nelson Partners company that later lost the building.
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Auraria Student Lofts, Denver: NB Auraria DST Form D, 2014 CMBS loan, 2019 sale and refinancing, and Chapter 11 Case No. 22-12059 (2014-2025)
128 rows from NB Auraria, DST's Form D and two D/As, the COMM 2014-CCRE19 prospectus and six of its monthly servicer reports, nine documents and the docket index of Bankr. D. Colo. No. 22-12059-KHT, and five press reports (sponsor claims and sale price, labelled as such).
This page follows one building through every public document we could find. Our Nelson Partners overview covers the sponsor family and its other properties; here the subject is Auraria Student Lofts alone, and the question most investors and advisers ask about it: how can a deal be announced as a 102% winner in 2019 and end in foreclosure in 2024?
Auraria Student Lofts, owner by owner
The short answer is that two different entities owned the building, and the press coverage mixes them up. The record lines up like this:
| Period | Owner of record | Financing | How the period ended |
|---|---|---|---|
| 2014 to late 2019 | NB Auraria, DST (CIK 1601802), sponsor Nelson Brothers Professional Real Estate; signatory trustee NB Auraria Services, LLC | $27,225,000 acquisition loan, 4.625%, in COMM 2014-CCRE19 (loan 17); DST interests offered: $12,920,000 | Property sold in late 2019; loan fully defeased in the December 2019 servicer report |
| Late 2019 to September 2024 | 5280 Auraria, LLC; member and manager Nelson Partners, LLC (Patrick Nelson) | $46,500,000 Cantor loan (November 20, 2019), $5,500,000 Auraria Stub mezzanine loan, $8,100,000 Nelson Partners equity | Loan matured December 9, 2021; receiver January 31, 2022; Chapter 11 June 9, 2022; stay lifted July 19, 2024 |
| September 2024 on | Fortress (reported) | Bought at the foreclosure sale | Reported price $54.8 million on September 5, 2024; deed not yet recorded at the time of the report |
The first owner is the one 1031 investors bought into. The second is a company owned by the sponsor's principal. The hand-off from the trust to 5280 Auraria in late 2019 is our reading of the servicer reports and the bankruptcy file together; we did not retrieve the 2019 deed. The 2022 bankruptcy case was filed by the second, and no document in it lists the 2014 trust as a party.
What NB Auraria DST investors bought in 2014
NB Auraria, DST filed its first Form D (signed March 4, 2014) for a $12,125,000 offering and amended it twice. The last amendment, signed July 31, 2014 by Brian Nelson as manager of the signatory trustee, shows the deal as sold to 1031 investors:
| Item (Form D/A, signed July 31, 2014) | Figure |
|---|---|
| Total offering amount | $12,920,000 |
| Sold as reported / remaining | $6,190,245 / $6,729,755 |
| Investors already invested | 25 (first sale July 14, 2014) |
| Minimum investment | $25,000 |
| Exemption | Rule 506(c) |
| Estimated sales commissions | $1,090,725 (8.4% of the offering, our arithmetic) |
| Estimated proceeds paid to named officers, directors or promoters | $1,800,000 (13.9%, our arithmetic) |
| Selling brokers listed | 9 registered representatives at five broker-dealers, one of them Brian J. Nelson (CRD 5065593) at Emerson Equity LLC |
Commissions and payments to the people running the deal add up to $2,890,725, or 22.4% of the offering (our arithmetic). The Form D does not say what the $1.8 million paid for; acquisition fees, financing fees and reimbursements are the usual categories (our reading). The trust never amended the filing again, so how much of the $12.92 million was eventually sold is not public.
The loan prospectus for COMM 2014-CCRE19 (loan 17, borrower NB Auraria, DST, sponsors Patrick Nelson and Brian Nelson) describes what the trust owned and owed:
| 2014 loan and property | Figure | Source note |
|---|---|---|
| Original balance | $27,225,000 | Acquisition loan; 4.625%; interest-only 36 months, then 30-year amortization |
| Maturity / balloon | August 6, 2024 / $23,900,645 | Call protection L(24), D(92), O(4): no prepayment, defeasance only until the last four months |
| Appraised value | $36,600,000 (May 16, 2014) | Loan-to-value 74.4%; balloon LTV 65.3% |
| Underwritten NOI / NCF | $2,341,671 / $2,275,971 | Debt service coverage 1.35x on amortizing payments |
| Historical NOI | 2011: $815,284; 2012: $1,494,528; 2013: $1,913,894 | Trailing 12 months to March 31, 2014: $1,928,475 |
| Occupancy | 2011: 67.6%; 2012: 82.2%; 2013: 91.8%; May 23, 2014: 99.5% | |
| Collateral | Two condominium units in a five-unit condominium | The borrower's units carry 35% of the association votes |
| Manager | Nelson Brothers Property Management, Inc. | Master lease to an affiliate, as with other DST borrowers in the pool |
Two features mattered later. The condominium structure means the trust never owned the whole tower; the prospectus says its 35% of the votes protects it against a 67% supermajority. And the defeasance-only call protection meant that any sale before 2024 required buying a portfolio of securities to replace the loan's payments, a cost the prospectus does not quantify.
The 2019 “102 percent” sale and who was on the other side
On December 23, 2019 AltsWire reported Nelson Partners' announcement that after “a five-year hold period” the sale produced “57 percent return on equity and more than a 45 percent return on cash flow, a 102 percent total return to investors”, with an IRR of 16.20%. The same day, another trade outlet reported that “Terms of the transaction and the buyer were undisclosed.” Those figures are the sponsor's claims; no audited statement, Form D update or court filing we found shows the trust's distributions or sale proceeds.
The buyer is named in the bankruptcy file. The Modified Disclosure Statement (Doc 270, filed December 14, 2022) says 5280 Auraria, LLC “acquired the Real Property in the fall of 2019 for an acquisition price of approximately $60 million, inclusive of transaction costs”, and that Nelson Partners, LLC “is the Member and Manager of the Debtor, and Patrick Nelson owns the equity interests in Nelson Partners.” The servicer reports for COMM 2014-CCRE19 time the exit: loan 17 had a scheduled balance of $26,273,138.02 in the November 2019 report and first appears in the Defeased Loan Detail, as “Full Defeasance”, in the December 2019 report, at $26,234,424.59. The new owner's loan documents are dated November 20, 2019.
Putting the two records together (our reading): the “undisclosed” buyer was a company controlled by the same sponsor that announced the 102% return. That is why both press stories are true: Nelson Partners “sold” the building in 2019, and Nelson Partners “bought” it in 2019. The sponsor was on both sides of the trade, so the price that produced the return was not tested by an outside buyer. A local business paper later put the 2019 price at $56.1 million; on the trust's side, that would leave roughly $29.9 million before defeasance and selling costs against the $26.2 million loan (our arithmetic), which is the scale needed to roughly double a $12.92 million raise. The arithmetic shows the claim is possible, not that it is accurate.
How the 2019 buyer was financed, and how it lost the loan
The Disclosure Statement lays out the buyer's capital: a $46,500,000 loan from Cantor Commercial Real Estate Lending, L.P. (two notes of $24.0 million and $22.5 million dated November 20, 2019), a $5,500,000 mezzanine loan from Auraria Stub, LLC secured by a second deed of trust and a pledge of 25% of the equity, and an $8,100,000 equity investment by Nelson Partners. Debt was 86.5% of the $60.1 million total (our arithmetic). The senior loan was due December 9, 2021, with extensions only if performance hit certain metrics.
| Date | Event, per the debtor's Disclosure Statement (Doc 270) |
|---|---|
| Fall 2019 to fall 2020 | 60% of the units renovated; renovations then paused as COVID-era leasing took priority |
| May 18, 2021 | Fortress Credit Corporation term sheet for a $56,205,202 refinancing; the debtor paid a $100,000 application fee. The loan never closed |
| On or about November 5, 2021 | Fortress, through DB Auraria, LLC, becomes holder of the Cantor notes; the recorded assignment indicates a $46 million purchase price |
| December 9 and 14, 2021 | Senior loan matures; Fortress sends a payoff letter demanding $49,875,161.41 and a notice of default |
| January 31, 2022 | Denver District Court (2022CV30256) appoints Cordes & Company LLP as receiver; Cardinal Group manages the property |
| June 9, 2022 | Public trustee foreclosure sale set for 10 a.m. (2022CV031030); 5280 Auraria files Chapter 11 the same day |
The debtor's account of these events is an allegation. It argued that “It is not credible, in the Debtor's view, that Fortress would have paid $46 million for a loan having a principal balance of $46.5 million” a month before maturity, and objected to Fortress's claim for breach of contract and of the covenant of good faith. The same document records that “Fortress disputes the Debtor's contentions and contends the claims are without merit”, and Fortress's response argued among other things that the debtor had signed a release of all claims against it.
Inside Case No. 22-12059: claims, values and the sponsor's own lender
The schedules and the 2022 Disclosure Statement give the balance sheet of the second owner at the moment it went under court protection:
| Item | Amount | Document |
|---|---|---|
| DB Auraria (Fortress) proof of claim | $51,112,064.77 ($48,500,000.00 secured, $2,612,064.77 unsecured) | Claim 10, as summarized in Doc 270 |
| Auraria Stub mezzanine proof of claim | $7,262,607.21 as of the petition date | Claim 9, Doc 270 (scheduled at $4,500,000.00 in Doc 38) |
| Total secured claims scheduled by the debtor | $55,718,347.11 | Schedule D, Doc 38 |
| Value of the property per the debtor | $65,000,000 (Schedule D); “$65 million or more” (Doc 270) | Debtor's own figure |
| Value implied by the debtor's plan payments, per Fortress | $48.4 million ($211,750 a month at 5.25%) | DB Auraria objection, Doc 274 |
| Unsecured claims scheduled | $1,723,281.09, of which $56,748.55 priority (former tenants' security deposits) | Schedule E/F, Doc 38 |
| Owed to Nelson-affiliated managers | $558,684.13 (Nelson Partners Property Management) and $54,643.80 (Nelson Brothers Property Management, Inc) | Schedule E/F, Doc 38 |
| DIP loan | Up to $1,500,000 from SP 180 Fund, LLC, an entity formed by Patrick Nelson; renovation budget $881,147.31 | Approved December 5, 2022 (Doc 261), described in Doc 270 |
On the valuation gap, Fortress put it plainly: “Both values cannot be right.” The debtor's first plan was to finish renovations, sell through Colliers International Denver (approved commission 0.5% of the price, Doc 252) and pay creditors from the proceeds in a set waterfall, with Nelson Partners' equity last. A November 2022 operating report listed total assets of $65,844,064 against liabilities of $57,559,732, figures that rest on the debtor's own valuation.
How the case ended: plan denied, stay lifted, Fortress sale
By 2024 the plan had become a hold-and-refinance plan paying DB Auraria $282,333.33 a month, and the debtor projected gross potential rent of $466,759 a month for January 2024, up from $285,126 projected for December 2022 (Exhibit 39 and Doc 270 Exhibit B). On July 19, 2024 the court entered an order denying confirmation of the Second Amended Plan (Doc 831) and an order granting DB Auraria relief from the stay to foreclose on 1051 14th Street and 1405 Curtis Street (Doc 832). As the debtor's August 2, 2024 motion to reconsider quotes it, the Plan Order found that the debtor “has had ample time and ample opportunities to put before the Court and creditors a plan of reorganization”, and set the interest the plan would need at $358,842 to $409,557 a month.
What followed comes from the docket and the press. BusinessDen reported that Fortress bought the property at the foreclosure sale on September 5, 2024 for $54.8 million, compared with the $51.1 million it was owed, and that the court's order had valued the property at $51 million to $58 million. The docket shows dismissal entries in April 2025 and a “Close Bankruptcy Case” entry on May 14, 2025; it also lists appeal-related entries in April 2025 whose content we did not retrieve.
Who absorbed the loss is not stated in any document we read. On the figures available, a $54.8 million sale against a senior claim that was $51.1 million in 2022 and kept accruing would leave little or nothing for the $5.5 million mezzanine loan and nothing for Nelson Partners' $8.1 million of equity (our reading, not a finding of the court).
Our read
The record supports three conclusions. First, investors who bought NB Auraria, DST interests in 2014 were not the owners in the bankruptcy: their trust's lender was taken out by defeasance in late 2019, and the trust is not a party in Case No. 22-12059. Second, the exit that produced the advertised 102% was a sale to the sponsor's own affiliate, financed 86.5% with debt (our arithmetic) on a two-year loan; the public documents do not show that any independent buyer would have paid the same price, and the building fetched a reported $54.8 million five years later. Third, 1031 investors who were offered Nelson Partners deals after 2019 on the strength of that track record were shown a track-record figure that came from a sale to the sponsor's own affiliate (our reading). None of this is a finding of wrongdoing by any court or regulator; we found none concerning Auraria.
What a DST investor or adviser can do with this
- If you held NB Auraria, DST interests, ask the signatory trustee's successor in writing for the 2019 closing statement and your final distribution. The trust agreement sets what the trustee must report; the public record does not include it.
- When a sponsor quotes a full-cycle return, ask who the buyer was, whether it was affiliated, and whether an independent appraisal supported the price. Our DST guide explains the trustee's limited powers that make affiliate sales possible.
- Read the Form D's Item 15, not only the commission line. Here, payments to the named persons were larger than the commissions; our DST fee analysis shows what other 2026 sponsors disclose.
- If a broker sold you a Nelson-era DST, check them on FINRA BrokerCheck and keep your offering memorandum; claims against a selling firm have deadlines. The 1031 exchange rules explain the identification deadlines that push investors into whatever DST is open.
FAQ
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Sources, read on October 11, 2026: NB Auraria, DST Form D and Form D/A filings on SEC EDGAR (CIK 1601802; accessions 0001601802-14-000001, 0001601802-14-000002 and 0001601802-14-000003); COMM 2014-CCRE19 Mortgage Trust prospectus (424B5, accession 0001539497-14-001003) and Form 10-D distribution reports, Exhibit 99.1, for October, November and December 2019, January 2020, November 2020 and August 2021 (accessions 0001056404-19-009422, 0001056404-19-010694, 0001056404-19-011765, 0001056404-20-000187, 0001056404-20-012652 and 0001056404-21-009768); In re 5280 Auraria, LLC, U.S. Bankruptcy Court for the District of Colorado, Case No. 22-12059-KHT: Schedules D and E/F (Doc 38), order approving broker (Doc 252), Modified Disclosure Statement (Doc 270), DB Auraria objection (Doc 274), monthly operating report for November 2022 (Doc 277), order on motion for relief from stay (Doc 832), motion to reconsider with Exhibit 39 and proposed order (Doc 840), and the docket index, all via CourtListener's RECAP archive; sponsor statements as reported by AltsWire and REBusiness (December 23, 2019); BusinessDen reports of June 13, 2022, July 29, 2024 and September 16, 2024 for the sale price and the court's valuation range. Percentages, sums and differences are our arithmetic. This is analysis of public documents, not investment, legal or tax advice.
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