$191M Foreclosure Scheduled For Office A Block From White House
Another downtown D.C. office building is slated for a forceful takeover.
American Real Estate Partners and Westbrook Partners’ 405K SF trophy office building at 1625 Eye St. NW is scheduled to be auctioned off at a foreclosure sale next month, according to a notice filed in the D.C. Recorder of Deeds.
Lenders ING Capital and German bank Münchener Hypothekenbank eG filed a foreclosure notice and affidavit on Friday, initiating the auction after the landlords defaulted on a mortgage with a $190.9M balance. The public sale is scheduled for the morning of June 16 at Harvey West Auctioneers.
AREP and Westbrook took out the loan in 2019 to finance their purchase of 1625 Eye, a block from the White House, for $259M. They completed a $5M renovation at the end of 2021, overhauling the lobby, including bringing in two large-scale artworks.
AREP declined to comment. Spokespeople for Westbrook, ING and MHB didn't respond to requests for comment.
Jason Pardo and Russell Drazin of law firm Pardo Drazin have been appointed as substitute trustees to oversee the foreclosure process.
The property has 92K SF of availability, according to CoStar records obtained by Bisnow. The largest block is for 31K SF on the second floor.
O'Melveny & Myers is the anchor tenant at the building, occupying 99K SF under a lease that expires in 2028. The National Fish and Wildlife Foundation has 65K SF that comes due in 2029, as does Simpson Gumpertz & Heger's 21K SF.
While the landlords and lender could still strike a deal to avert a foreclosure, a parade of large downtown office buildings have been auctioned off over the past few years, as office vacancy has hovered above 20% and interest rates remain inflated.
Last spring, Starwood Property Trust foreclosed on Brookfield’s 1200 K St. NW near Franklin Park and took control of the 383K SF property, where it is planning a residential conversion.
In October, lender Blackstone Mortgage Trust took over four of JBG Smith's office buildings at L’Enfant Plaza at another foreclosure auction.
And in a deal that hasn't been previously reported, Goldman Sachs and its partners took over Columbia Property Trust's 1800 M St. NW earlier this year. After filing to foreclose in November on the $302M mortgage tied to the building, it took over the property for $111M via a trustee’s deed filed Jan. 10.
