Finance  ·  CMBS

D.C. Area Office Portfolio Transferred to Special Servicing


A securitized loan on a portfolio of Washington metropolitan area office buildings totaling $203 million was moved to special serving this week for reasons labeled “other,” Mortgage Observer has learned.

The portfolio, known as Lafayette Property Trust, makes up 7 percent of the CMBS deal JPMCC 2007-LDPX, which has a current balance of $2.9 billion, down from an original balance of $5.4 billion, according to data obtained by Trepp and provided to MO.

SEE ALSO: CLO Loan Secured by Fort Lauderdale Office Tower Enters Special Servicing

The borrower is listed in public records as Lafayette Buildings, LLC, which is indirectly sponsored by Lafayette Real Estate. (Lafeyette Real Estate is 30 percent owned by Duke Realty Corporation and 70 percent owned by Belcrest Capital Fund, an investment fund managed by Eaton Vance, according to Trepp.)

A remittance report shows that the special servicer, C-III Asset Management, is reviewing the file and plans to schedule borrower meetings and site inspections before it engages counsel.

The portfolio’s net operating income for the first nine months of 2014 was $15.2 million. If that continues in the fourth quarter, the NOI will be on the decline for a third straight year. Net cash flow and debt service coverage ratio have all been on a downward trend since the loan was securitized in 2007, according to Trepp.

The not-for-profit research firm CNA previously occupied 75 percent of the space at one of the portfolio’s properties, 4285 Mark Center Drive in Alexandria, Va., but relocated to another office in Arlington, Va., in June 2013, according to news reports at the time.

The aggregate occupancy for the Lafayette Property Trust portfolio is now at 75 percent.

The borrower is “seeking modification in exchange for capital investment to re-tenant property due to existing vacancies,” the remittance report states.