Finance  ·  Distress

Monday Properties Recapitalizes Nestlé HQ to Avoid Foreclosure

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Monday Properties has recapitalized its debt on the Nestlé USA headquarters building in Arlington, Va., averting a foreclosure auction scheduled for this week, the company confirmed.

A month ago, mezzanine lender RBC Real Estate Capital Partners moved to facilitate a Uniform Commercial Code foreclosure for the 581,000-square-foot property at 1812 North Moore Street, according to an offering from Eastdil Secured

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The 35-story Rosslyn property, developed by Arlington-based Monday Properties in 2013, was scheduled to go to auction Dec. 18 in New York City, the Washington Business Journal first reported

We have successfully recapitalized 1812 North Moore Street,” Monday Properties said in a statement. This restructuring has not only secured the future of the property but has set the stage for a promising trajectory.”

RBC did not immediately respond to requests for comment. 

Nestlé occupies around 325,000 square feet at the property, with other tenants including health insurance firm Humana and healthtech firm Cerner bringing it to 76 percent occupied, per the offering. Monday Properties has also invested in the building, adding spec suites to the 17th floor, which were 62 percent occupied at the time of the offering. 

The foreclosure of the trophy property would have been a blow to the D.C.-area market, reeling as it is from the post-pandemic pullback in office attendance. 

The last several months have seen an uptick in foreclosures, defaults and distressed loan sales, indicating that the wave of pain brought on by the pandemic is beginning to hit home. In the most high-profile retreat, Blackstone and Boston Properties ceded control of the 675,000-square-foot Metropolitan Square in Washington, D.C., to mezzanine lender Artemis Real Estate Partners in October. 

Chava Gourarie can be reached at cgourarie@commercialobserver.com.