$16.4 Million Non-Performing Office Senior Loan Sale | Washington, D.C.

Attributes

Building area gross

5,204 m²

Year built

1963

Year renovated

1997

Zoning

D-6-R

Loan status

Non-Performing

Unpaid principal balance

CN¥119,122,751

Maturity date

10/03/2024

Asset Description

Jones Lang LaSalle (“JLL”) has been retained on an exclusive basis by the Seller to arrange the sale of a $16.4 million non-performing senior loan (the “Loan” or “Note”) secured by a first-lien deed-of-trust on the fee simple interest in an office property in Washington, D.C. (the “Property” or “Collateral”). The Loan was originated in June 2016 to refinance the Sponsor’s interest in the subject Property. The Loan is currently in maturity default as of March 10, 2024 with an unpaid principal balance of $16,411,031 ($293 PSF). The Lender is currently negotiating a Deed-In-Lieu with the Sponsor.

The Property is a ten-story boutique office building located in the East End submarket of Washington, D.C. Originally constructed in 1963 and renovated in 1997, the Property currently consists of 56,018 GSF across one building and sits on a 0.12-acre (5,243 SF) parcel zoned D-6-R within the Downtown Arts Sub-Area. The entire building is vacant, affording investors a rare blank canvas for redevelopment or full conversion to an alternative use.

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Investment Highlights

FULL-BUILDING VACANCY BRINGS INVESTOR OPTIONALITY

The entire building is vacant allowing investors prime optionality to redevelop or convert to an alternative use. Additionally, existing building infrastructure makes the Property an ideal repositioning candidate, offering boutique floor plates, a corner location with three sides of abundant natural light, and a side-loaded core.

FLEXIBLE, AS-OF-RIGHT ZONING

Flexible D-6-R zoning in Downton Arts Sub-Area permits for as-of-right high-density residential or hospitality uses. D-6-R zoning allows for a maximum FAR of 8.5 for residential, hospitality, and non-residential uses, while the Downtown Arts Sub-Area allows for a maximum FAR of 10.0 pursuant to providing on-site arts uses or obtaining arts credits.

ATTRACTIVE BASIS

The opportunity offers an attractive basis for investment. The last-dollar exposure of the Loan currently sits at a 49.3% discount to the origination appraisal. This provides investors with the opportunity to acquire the Loan at a reset basis, providing an excellent opportunity for potential capital appreciation.

LENDER CONTROLLED SALE

Given the direct process with the Lender and the expected Deed-In-Lieu, investors will have increased transparency and comfort around the ability to effectuate a transaction.

CENTRAL, AMMENITY-RICH EAST END LOCATION

The East End submarket represents the most densely concentrated amenity base in the entire Washington, DC metropolitan region. The Property offers Tenants unmatched access to the nation’s most prominent historical landmarks that reverberate the District’s rich culture.