A Chinatown office building previously home to D.C.’s juvenile justice agency was hit with a drastic cut to its property value.
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450 H St. NW received an updated appraisal of $550K, a 97% drop from its initial $18.1M valuation, CMBS monitoring platform Morningstar Credit revealed Wednesday.
The new valuation comes after foreclosure of the building was finalized in April, according to Morningstar.
The 31K SF, 10-story building had been the headquarters of D.C.'s Department of Youth Rehabilitation Services since 2002. The agency opted not renew the lease, and as of April 30, the property is fully vacant.
DYRS now lists 1100 Fourth St. SW as its headquarters. A spokesperson for the agency didn’t immediately respond to a request for comment.
The previous owner of 450 H St., an affiliate of Harbor Group International, owed $10.7M on a loan originlly issued in 2014, the Washington Business Journal reported in March, citing a foreclosure notice. The special servicer of the property is LNR Securities Holdings LLC, according to Morningstar.
D.C. office buildings have been suffering sharp drops in value in recent years since the pandemic upended the market, but this building's 97% cut represents a particularly big loss.
Michael Magerman, vice president of Morningstar Credit Analytics, told Bisnow he has seen similar situations in which the value of a property dropped to 20% to 50% of the original value after losing its lone tenant, but in this case, the small size and age of the building could have pushed the value down lower. The building was constructed in 1986.
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