More high-quality office properties in the nation’s capital are headed to the auction block.
An affiliate of Carr Properties is facing a foreclosure auction of 2001 Pennsylvania Avenue NW in Washington, D.C., the Washington Business Journal reported. The auction of the 11-story, 158,000-square-foot building is set for June 25.
A foreclosure notice and affidavit that appeared in the city’s Recorder of Deeds last week shows an outstanding balance of $65.8 million on the loan the Carr affiliate received from Met Life Real Estate Lending when it acquired the property for $108 million in 2014.
The property was constructed in 1990 and renovated seven years ago with glass storefronts, upgraded elevators, a larger fitness center and common areas on the concourse floor.
The property joins a 123,000-square-foot, 10-story office building at 1750 H Street NW facing foreclosure auction, despite a recent renovation. Lender State Farm said joint venture Office Properties Income Trust and AEW defaulted on their mortgage with $32.7 million outstanding, the Washington Business Journal reported.
A 91,000-square-foot office building in the city’s Dupont Circle neighborhood is also scheduled for auction this month, after a foreclosure notice claimed an affiliate of Boston’s ELV Associates Inc., owner of 1776 Massachusetts Ave. NW
Occupancy became a notable issue in the aftermath of the pandemic. A leasing brochure from last June listed 57,000 square feet available, equating to a vacancy rate of 36 percent.
Representatives for Carr did not respond to a request for comment.
Carr took another sizable hit on its office portfolio at the start of the year when it put 720,000 square feet on the market at the Midtown Center. Fannie Mae occupies 752,000 square feet at the property after signing a 15-year lease to anchor the $650 million property, but most of its space is set to become available in five years.
The only other office tenant there is WeWork, which worked out a deal to stay in place but with less space, according to the Commercial Observer.
Carr isn’t the only developer struggling to fill its properties in the nation’s capital.
D.C.’s office vacancy rate stood at a record high of 19.4 percent at the end of the first quarter, according to Colliers. Net absorption in the first quarter was negative due to tenants giving back 424,000 square feet, according to JLL.
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