Jones Lang LaSalle Americas, Inc (“JLL”) is pleased to offer for sale a matured commercial mortgage loan with an unpaid principal balance of $54,901,249 (the “Loan”) secured by a first-lien deed of trust on the fee-simple interest in a 192,291-SF, office building located in Washington, DC (the “Property” or “Collateral”).
The Loan was originated in October 2017 for an initial four-year term maturing October 9, 2021. The Loan included an initial advance of $43,305,000 with $31,475,000 of future funding available to pay for capital expenditures, interest carry, and leasing costs. The Loan is now in default as the borrower failed to make the September 2021 debt service payment as well as pay off the Loan at the initial maturity date, as the Loan extension requirements have not been met.
The Property is an 11-story office building constructed in 1988 on a 1.023-acre site. While the Property was 79.7% occupied at Loan origination, it was known that the major tenant (142,566-SF, 74.1% of GLA) was going to vacate upon lease expiration in October 2018. Consequently, occupancy has declined to 5.1% as of August 2021.
The Property is strategically located in the NoMasubmarket of downtown Washington, DC close to Union Station with access to Metro, Amtrak, VRE and MARC commuter trains, as well as a short walk to the US Capitol building.
The offering presents investors with a prime opportunity to acquire a note at an attractive basis secured by a well located, Class B office building that has significant upside potential.
INVESTOR OPTIONALITY - The Loan is currently in default, presenting investors with optionality to workout, modify, or potentially pursue title to the Collateral.
DESIRABLE BASIS - An investor would benefit from acquiring the note at a significant discount to the Sponsor’s current basis.
LEASE-UP POTENTIAL - With a vacancy rate of 94.9%, the Property offers a value-add opportunity through the lease-up of 182,422-SF contiguously available space, including 9 full-floors.
TRANSIT-ORIENTED LOCATION - Close to Union Station (Metro/Amtrak/VRE/MARC), the transportation gateway to the nation’s capital city, Union Station serves over 40 million commuters/visitors annually and is home to an amenity base of over 50,000-SF of restaurants and retailers.
NoMa SUBMARKET (NORTH OF MASSACHUSETTS AVE) - The transit oriented NoMasubmarket has the lowest office vacancy rate among the major submarkets in Washington, DC. Additionally, the area has seen significant retail and residential development over the past decade, transforming the neighborhood into an attractive work-play-live environment.