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BGO Hands Over D.C. Office Building To Lender After Buying It For $175M

Six years after acquiring an office building in D.C.'s West End, New York-based investment giant BGO has handed over the keys to its lender. 

The office building at 1200 New Hampshire Ave. NW in D.C.

A Brookfield Asset Management fund this week took control of 1200 New Hampshire Ave. NW through a deed-in-lieu-of-foreclosure transaction, according to deed records. Documents show Brookfield acquired the loan in April. 

GreenOak Real Estate paid $174.5M for the building in September 2018 before it merged with Bentall Kennedy to form BGO, and it obtained a $123M loan from Citibank. In April, deed records show that Citibank sold the loan to Brookfield, and the loan terms were modified earlier this month to reduce the principal amount from $123M to $70.8M. 

BGO declined to comment. Brookfield didn't respond to request for comment. The entity that took over the building is listed as BSREF Holdings — BSREF is Brookfield Senior Mezzanine Real Estate Finance Fund, according to a filing, its perpetual commercial real estate debt vehicle.

The building's proposed assessment for next year is $150.8M, down from its assessed value this year of $157.6M and its 2023 value of $168.1M, property records show. 

The 311K SF office building was constructed in 1979. It was fully leased at the time of the 2018 sale. BGO renovated the building in 2021, according to the Washington Business Journal, which first reported this week's ownership change. 

Newmark was awarded the leasing assignment for the building in 2019, but JLL is now listed as the leasing representative on the building's website. 

The office occupancy today isn't publicly available, and JLL declined to comment. Its tenants include television station Al Jazeera International and law firms Grossberg, Yochelson, Fox & Beyda, LLP and Friedman Law Offices.

The building's retail features Tatte Bakery & Cafe, which opened its first D.C. location at 1200 New Hampshire in 2020 before launching a major expansion in the city. Last year, plant-based restaurant Planta opened in the building.

The building is the latest in a series of D.C. office buildings taken by their lenders in recent months amid a combination of record vacancy, high interest rates and capital sources not wanting to put more money into offices. Brookfield was on the other side of a similar situation last month when a building it owned at 1200 K St. NW was acquired at a foreclosure auction by lender Starwood.