Affinius Capital handed over the keys to a 306K SF Washington, D.C., office building after the property's mortgage was sold to a pair of investors. 

D.C.-based Assembly Real Estate, in partnership with London-based FitzWalter Capital Partners, took control of 700 Sixth St. NW, which sits just north of Capital One Arena, D.C. deed records show. 

The partnership took ownership by buying a $140M note from lender Principal Real Estate Investors for $79.5M and taking out a $54.2M loan from Citi Real Estate Funding Inc. for the acquisition. 

It executed a deed-in-lieu-of-foreclosure transaction late last week with Affinius.

Assembly declined Bisnow's request for comment on the acquisition. FitzWalter Capital, Affinius and Principal didn’t respond to requests for comment. 

Bisnow reported this spring that JLL was marketing a $140M loan tied to the building with a “path to ownership.” Marketing materials at the time said the fixed loan with a 3.7% interest rate was maturing in June. 

Principal provided a $140M refinance for the property in 2019, deed records show. The balance on that note was $145.8M as of the date of the latest sale, according to deed records.

Assembly was founded earlier this year by Gordon Fraley, who was previously with Altus Realty, and Isaac Metzger, previously with Grosvenor. The firm focuses on “value-add, opportunistic, and special situations opportunities across all asset types,” according to its website, including conversion and development projects.

FitzWalter is a global private investment firm with offices in London, New York and Hamburg, Germany, that invests in real estate as one of its lines of business, in addition to “corporate businesses, real estate, renewables, aircraft and other ‘hard assets,’” according to its website.

700 Sixth was developed by Akridge in 2009. Affinius Capital’s predecessor, USAA Real Estate, purchased it in June 2011.

JLL’s marketing materials said 700 Sixth was 79% leased with a 7.8-year weighted average lease term, anchored by two long-term tenants.

Law firm Eversheds Sutherland lists 700 Sixth as its D.C. office on its website. The firm inked a 143K SF lease at the property at the end of 2018. Cadwalader previously had a 100K SF office in the building, but it moved in early 2024 to a smaller office at 1919 Pennsylvania Ave. NW.

Office vacancy in the D.C. area has been around 20% since the pandemic upended the office market and sent tenants downsizing while opting for higher-quality space. 

In the third quarter, the city’s office market was 21.8% vacant, according to CBRE, with trophy vacancy at 8.3%.

The growing divide between top-tier and commodity office over the past few years has caused the city's office stock to trade at steep discounts. That has led to a wave of new investors buying older office buildings for cheap and planning substantial renovations to soak up trophy demand.