Lender Selling $140M Downtown D.C. Office Loan With 'Path To Ownership'
Another downtown D.C. office building is up for grabs after its owner failed to make adequate payments on its loan ahead of its June maturity.
JLL is selling a subperforming $140M loan on a D.C. office building, according to marketing materials from the brokerage.
The materials don't specify which building the loan is backed by, but they describe it as a 306K SF office building constructed in 2009 near Gallery Place with a loan that was originated in May 2019. Those details line up exactly with the publicly available information on the office building at 700 Sixth St. NW.
The property is owned by Affinius Capital, and Principal Real Estate Investors is the lender. Those companies and the JLL brokers marketing the loan didn't respond to Bisnow’s requests for comment.
The fixed loan with a 3.7% interest rate matures in June. Given that looming expiration, JLL is marketing the loan as having a “path to ownership.”
The building is 79% leased with a 7.8-year weighted average lease term, according to JLL’s marketing brochure. It says the property is “anchored by two prominent long-term tenants.”
Developed by Akridge in 2009, the 12-story building at 700 Sixth St. NW sits just north of Capital One Arena.
Affinius’ predecessor, USAA Real Estate, purchased the property in June 2011. It refinanced in May 2019, which is when it obtained the $140M loan from Principal, D.C. deed records show.
Monumental Sports Network, the media company affiliated with the Washington Capitals and Wizards — the NHL and NBA teams that play next door — is a tenant, according to its website. Law firm Eversheds Sutherland also lists 700 Sixth as its D.C. office.
Law firm 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.
The loan sale comes amid a larger office valuation reset underway in downtown D.C. Office buildings that are underwater on their loans are selling for cheap, with their new owners investing to renovate them into higher-quality office or repurpose them as residential.
Taicoon Property Partners, founded in 2023 by Sentinel Real Estate veteran Hai Chien Wang, has purchased four office buildings in the D.C. area over the past two years, including three in downtown. All of the properties were in loan distress, Bisnow reported in January.
Matthew Jemal, the younger son of Douglas Jemal of Douglas Development Corp., has also been scooping up office buildings in the region through a new venture called Jemal Equities. His latest grab was for the 1980s-era Lion Building near Dupont Circle. Jemal purchased the loan in December and subsequently foreclosed on the building, taking it back at a foreclosure sale in late February.
