$130M Loan Tied to FEMA HQ in D.C. Transferred to Special Servicing Again
It’s the second time the debt has moved to servicing since 2022
By Nick Trombola December 16, 2024 5:22 pm
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Debt tied to the office complex housing the Federal Emergency Management Agency in Washington, D.C., has been transferred to special servicing for the second time in the latest episode in the saga over the agency’s headquarters.
The $130 million commercial mortgage-backed securities loan on Federal Center Plaza, a 725,317-square-foot complex at 400 and 500 C Street SW, moved to special servicing in November due to imminent default, according to the Business Journals, citing a bondholder note. Bethesda, Md.-based The Donohoe Companies owns the plaza, which it developed in the early 1980s. Occupancy at the eight-story tower was 74.4 percent as of June this year.
The full balance of the loan remains outstanding. The debt, which originated in 2013 as part of the Cantor Fitzgerald-led COMM 2013-CR6, was initially moved to special servicing in 2022, though its maturity date was ultimately pushed from February 2023 to February 2025, with another one-year extension option.
FEMA occupies about 465,000 square feet across the two buildings in a lease that runs until 2027. The General Services Administration, which manages the federal government’s real estate portfolio, had intended to move and expand FEMA and other agencies to a roughly 941,000-square-foot facility it owns at 301 Seventh Street SW, dubbed the Regional Office Building, though it opted to scrap those plans over the summer. A $188 million plan to renovate the 1930s-built property was also canceled, with GSA officials at the time citing “current market conditions.”
Then, earlier this month, the GSA said it would instead sell, transfer or exchange the Regional Office Building, along with seven other properties it owns across the country, in a bid to save nearly half a billion dollars in taxpayer funds over the next 10 years.
Donohoe meanwhile is attempting to re-sign FEMA for a 15- to 20-year lease for up 600,000 square feet, per the Business Journals, though the GSA’s ultimate plans for the disaster relief agency are unclear.
Representatives for Donohoe and the GSA did not immediately respond to a request for comment or more information.
Nick Trombola can be reached at ntrombola@commercialobserver.com.
