Unizo Delinquent On $211M Loan Tied To 2 NoMa Office Buildings
Unizo Holdings Co., the Japanese investor that once dominated the D.C. office sales market, has failed to pay a $211M loan on two NoMa office buildings in recent months — after losing a trio of downtown office buildings to its lender in December.
Unizo's CMBS loan backed by the office buildings at 820 and 1100 First St. NE has been transferred to special servicing, according to Morningstar Credit.
Unizo missed payments on the loan backing the NoMa office properties in April, May and June. The buildings total more than 620K SF and have large tenants including research firm Mathematica and CNN's D.C. bureau.
A note from Morningstar says the delinquency is “surprising on the surface,” as the cash flow last year, though 24% below underwriting, had a nearly 2.2x debt service coverage ratio.
Unizo purchased both NoMa office properties in August 2016. The company paid $217M for the 349K SF Mathematica building at 1100 First, which was built in 2009, and $141M for the 280K SF property at 820 First, where CNN is housed, built in 1990.
820 and 1100 First were 85% occupied as of the end of last year, and some of their largest tenants have lease expirations in 2026, according to Morningstar.
At 1100 First, Mathematica Policy Research’s 125K SF lease expires in October 2026, and the Department of Veterans Affairs’ 62K SF lease expires in June 2026.
The General Services Administration has a 22K SF lease at 820 First that expires in March 2026. The database also shows that the GSA had a 30K SF footprint at 1100 First that expired in January, and Accenture’s 66K SF at 820 First expired in February. The building isn't listed on Accenture’s website.
GSA tenants lease 20.1% of the buildings' office space and make up 21% of the underwritten rent, a notable portion given the federal government's ongoing strategy to cut down on leased space.
Barclays and Citi Real Estate Funding Inc. originated the loan to refinance the two office buildings in 2021. The $211M note was broken into seven loan pieces. A $65M piece is now specially serviced by LNR Securities Holdings, and the other six pieces are specially serviced by CW Capital Asset Management.
The special servicers didn't respond to requests for comment.
The transfer to special servicing comes shortly after Unizo lost three downtown office properties to foreclosures.
New York Life Insurance Co. took control of 1111 19th St., 1030 15th St. NW and 1341 G St. NW through a Dec. 17 foreclosure auction. The Washington Business Journal previously reported that the auctions were scheduled, and deed records show the properties went to the lender.
Unizo and New York Life didn't respond to requests for comment.
Unizo acquired the buildings during a buying spree in which the Japanese investor became one of the most active players in the D.C. market. Over 15 months during 2016 and 2017, it spent $1.2B on eight office properties in the District, Bisnow reported at the time.
But it then sold two of those buildings for losses in 2019, before the pandemic tanked values in the city's office market, and it had reportedly been looking to sell others. In 2020, the controlling stake in Unizo was acquired by Dallas-based Lone Star Funds, and in 2023, the company filed for bankruptcy protection in Japan.
