Ranger Properties spent years of sweat equity preparing a 110-unit multifamily development in Washington, D.C.’s Union Market neighborhood, but it barely took a year for distress to come for the New York-based developer.
The Lanes at Union Market is being foreclosed upon by the property’s noteholder, Bisnow reported. Records already show filings of a foreclosure notice and foreclosure affidavit. Local auction house Alex Cooper is conducting the auction on May 23.
It’s a stunning turn for Ranger, if for no reason than the speed at which it lost the 12-story, 110,000-square-foot property after delivering it early last year. The building at 400 Florida Avenue NE is in a popping neighborhood of the district, a block away from a lauded food hall.
Ranger purchased the property in 2017, but it took two years to get entitlements, according to the investor’s noteholder, Srinivas Chavali. In 2019, EagleBank issued a $33.7 million construction loan, increasing the debt a year later to $39.5 million.
The timing wasn’t great for Ranger, however, as the pandemic reared its head in 2020. Delays and increasing construction costs soon followed, postponing delivery of the building for two years; as of Monday morning, Ranger’s property profile still shows an estimated delivery date of fall 2021.
The construction loan came due last year. Ranger did not respond to requests for comment from Bisnow.
Chavali purchased the nonperforming loan backing the property in January. The investor frequently buys and sells nonperforming loans.
The net operating income of the 89 percent-occupied property is only $1.5 million as of last month, according to the auction house, but that’s bound to improve as rent concessions sunset for the building’s first tenants. There’s also an 1,100-square-foot retail space occupied by UPS and a 2,300-square-foot retail space that’s vacant.
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The proposed assessment of the property by the city for fiscal year 2025 is $62.6 million.
Founded in 2007, Ranger is run by principal Sheldon Stein and largely focuses on new developments in the commercial and residential sectors. In 2021, Ranger and partner KD Sagamore Capital scored a $40 million construction loan on a 113-unit development in Clinton Hill, Brooklyn, which was stalled for so long that a sapling sprouted on the site.