Downtown D.C. Office In Receivership Hits Market For Conversion
A 1970s-era D.C. office building owned by a Brazilian department store magnate is on the market as it approaches full vacancy.
Avison Young has been tapped to sell 2025 M St. NW and is pitching the 191K SF property as a residential conversion with a potential unit count of between 260 and 270.
The West End property, which is owned by Michael Klein, the CEO of Brazilian department store chain Casas Bahia, was ordered to be placed in receivership in November, the Washington Business Journal reported at the time.
The receiver, Trigild IVL, is now guiding the marketing process, Joe French, a principal with Avison Young's U.S. capital markets group, told Bisnow in an email. French is brokering the property alongside AY associate Kyle Borda.
Trigild IVL did not immediately respond to a request for comment. Grupo CB, Klein’s family holdings company, also did not respond to a request for comment in time for publication.
AY’s brochure says 2025 M is expected to be fully vacant by the end of January 2027. It notes that the property contains 240 spaces of below-ground parking across three levels, which it called “a rare attribute for a downtown conversion that materially enhances lease-up velocity, renter appeal, and long-term exit liquidity.”
The listing says the property's zoning allows for multifamily use by right and that it is eligible for D.C.’s Housing in Downtown 20-year tax abatement.
French said his team has evaluated more than 50 office-to-residential conversion opportunities across the D.C. metro over the past year and that only a “handful met today's underwriting requirements," with 2025 M showing the “strongest” opportunity.
“Investors have a rare opportunity to acquire a well-located asset that can be transitioned into a Class A residential community without many of the hurdles that often slow redevelopment projects,” he said.
The office building at 2025 is anchored by media nonprofit Radio Free Asia. The organization lost its federal money — its main funding source — last year but resumed limited operations in February.
Radio Free Asia had two separate leases at 2025 M totaling 89K SF, comprising less than half the building’s square footage, according to Morningstar Credit. Those leases were set to expire in 2033. The nonprofit is still located at the property, French said.
The nonprofit is aware of the potential sale and is planning accordingly, a Radio Free Asia spokesperson said in an email.
The property has been struggling financially since at least July 2024, when the CMBS loan backing it was transferred to special servicing ahead of its April 2025 maturity, Bisnow reported at the time.
Klein’s ownership affiliate, Mikeone EK M Street Holdings LLC, purchased 2025 M in March 2015 for $106M. To partially fund the purchase, it secured a $63.6M loan originated by RAIT Financial Trust and then sold into a JPMorgan Chase-created CMBS trust.
But the owner defaulted on the CMBS loan. The loan matured in April 2025 and has a current balance of $53.6M, according to Morningstar.
Morningstar Associate Managing Director David Putro told Bisnow that a conversion pitch like the one for 2025 M is not uncommon for distressed office property sales.
“We're seeing more and more of that, and especially in the cities that are still really feeling their way out of the bottom — you know, D.C., Philly, Chicago —we're seeing a lot of, at least, the brokers advertising as, 'Here's why this would be fit for conversion if you choose to do so,’” he said.
2025 M is a block away from 2100 M St. NW, where BXP has plans to develop a 320K SF office property for law firm anchor Sidley Austin. Construction is expected to start in 2028, and it is expected to deliver in 2031.
CORRECTION, JULY 20, 6:45 P.M. ET: This story was updated to correct Joe French's title at Avison Young.
UPDATE, JULY 20, 5 P.M. ET: This story was updated with a comment from Radio Free Asia.
