DC Mall Commands $38M in Foreclosure Auction

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Annaly Commercial Real Estate Group cast the winning $38 million bid at auction to become new owners of Washington, D.C.’s Mazza Gallerie Mall, after its original owners, Ashkenazy Acquisition Corp., lost the property to foreclosure.

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The news, reported first by the Washington Business Journal, comes less than three weeks after it was announced by Alex Cooper Auctioneers that the popular site would be put for auction.

Located at 5300 Wisconsin Avenue in D.C.’s Friendship Heights neighborhood, the 294,000-square-foot retail center is anchored by Nieman Marcus, which is temporarily closed. Other notable retailers calling the mall home include T.J. Maxx, Heritage and Saks Fifth Avenue.

It also has a McDonald’s, Subway and AMC Theater among its tenants.

Ashkenazy originally acquired the property in 2017 for $78 million, securing approximately $67 million in loans from Annaly CRE Holdings to complete the deal. The loans matured in January, and the debt was not repaid, forcing the foreclosure.

The company tried to fight the foreclosure in court this summer, arguing it was protected by D.C.’s emergency order requiring lenders to grant deferrals on payments to borrowers who have been financially impacted by the pandemic, but it was denied since its repayment problems started a couple of months before the pandemic.

Although Annaly declined to comment on plans for the mall, many believe that it may simply wait out the pandemic until conditions improve and resell the property.