Blackstone Mortgage Trust Wins D.C. Office Portfolio at Auction for Bargain Price

Yet another set of office properties in Washington, D.C., have sold at foreclosure auction, and the buyer is a familiar face.

Blackstone Mortgage Trust (BXMT), the former lender on the four-property portfolio and the sole bidder at Wednesday’s auction, paid $83.7 million for the collection at the District’s L’Enfant Plaza — far less than its most recent appraised value of $365.6 million, according to the Business Journals. 

The buildings, at 470 L’Enfant Plaza SW, 490 L’Enfant Plaza SW, 955 L’Enfant Plaza SW and 429 L’Enfant Plaza SW, were written off by former owner JBG Smith (JBGS) early last year and set for foreclosure auction last month. The portfolio had an outstanding balance of about $238 million at the time of the foreclosure notice. 

A representative for BXMT declined to comment. 

Lenders acquiring buildings from their borrowers is an all-too-common trend in D.C., with BXMT’s purchase as just the latest instance. 

Merchant bank BDT & MSD Partners in August, for example, paid the relative bargain of $100 million for the former Trump International Hotel, now a Waldorf Astoria property, on Pennsylvania Avenue after former owner CGI Merchant Group defaulted on a $285 million note tied to the property that the bank issued in 2022. 

In June, meanwhile, State Farm Life Insurance paid just $17.6 million for a 123,000-square-foot office a few blocks from the White House, after former owners Office Properties Income Trust and AEW defaulted on a loan provided by State Farm. The building last sold in 2010 for $65 million. That same month, science advocacy nonprofit Society for Science paid $10 million at auction for 1776 Massachusetts Avenue NW, less than a quarter of what former owner ELV Associates paid for it in 2012. 

Nick Trombola can be reached at ntrombola@commercialobserver.com.