Beacon Capital Partners’ Lafayette Centre in Downtown DC Sent to Special Servicing
By Nick Trombola June 17, 2024 5:25 pm
reprints
Another day, another Washington, D.C., office building stranded in financial distress.
The afflicted borrower this time is Beacon Capital Partners, whose $243 million loan on the Lafayette Centre property has transferred to special servicing and is on the brink of default, according to data sourced from Trepp.
Goldman Sachs (GS) provided the financing for the nearly 800,000-square-foot monster of an office complex, at 1120 20th Street NW and 1133 & 1155 21st Street NW, which is set to mature in 2027. Beacon’s payment on the loan was current throughout its life span until now, according to Trepp.
The problem likely lies with the building’s main tenant — the Commodity Future Trading Commission (CFTC) takes up more than a third of the available space there, and Beacon’s loan was underwritten with CFTC paying $55 per square foot, or more than 48 percent of the building’s base rent, per Trepp.
However, the General Services Administration, which oversees the federal government’s real estate commitments, plans to have the agency vacate the building once its lease expires in September 2025, as part of the GSA’s broader plan to reduce its office footprint around the country.
A representative for Beacon declined to comment.
The Lafayette Centre is far from the only troubled office building in D.C. A 10-story, 123,000-square-foot office building at 1750 H Street NW is headed to foreclosure auction after owners Office Properties Income Trust and AEW defaulted on the mortgage provided by State Farm. Nearly $33 million of that loan is still outstanding, according to a foreclosure notice posted last month.
Earlier that same month, an affiliate of Clarion Partners handed over 701 Eighth Street NW to lender Voya Investment Management in lieu of foreclosure. About 81 percent of Clarion’s principal loan balance, or $33.3 million, remained outstanding before the transfer.
Nick Trombola can be reached at ntrombola@commercialobserver.com.
