D.C.’s massive Lafayette office complex debt heads to special servicer

Beacon nears default on $243M loan, as government tenants cut office

Beacon’s Office Debt in DC Banished to Special Servicer

A photo illustration of Beacon Capital Partners CEO Fred Seigel along with 1120 20th Street NW in Washington, D.C. (Getty, Beacon Capital Partners, Google Maps)

The Lafayette Centre in Washington, D.C. is no beacon for the local office market.

The $243 million loan backing Beacon Capital Partners’ office complex in the nation’s capital transferred to special servicing, the Commercial Observer reported, via data on Trepp. The landlord is nearing default on the debt.

The loan isn’t set to mature until 2027. Goldman Sachs provided the debt for the mammoth 800,000-square-foot office complex — addressed at 1120 20th Street NW and 1133 & 1155 21st Street NW — and Beacon had been current on the loan.

But Beacon is on the verge of taking a big hit in occupancy. The core tenant is the Commodity Future Trading Commission, a government agency that occupies more than a third of the leasable square feet of the complex and accounted for nearly half of the base rent at the time the loan was underwritten.

But the CFTC is expected to vacate the property in September 2025, as part of the General Service Administration’s larger plan to reduce the federal government’s office leasing across the country. That will leave a massive hole for Beacon to patch up.

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A Beacon representative declined to comment to the Observer.

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While facing distress in D.C., Beacon is embracing office markets elsewhere. The Boston-based firm was recently reported to be nearing a deal to acquire a 36-story office building on West Wacker Drive in Chicago from a venture of the AFL-CIO Building Investment Trust. The deal could be the city’s largest downtown office deal in two years.

As for the nation’s capital, there are other owners who may commiserate with Beacon on the office front. In recent weeks, multiple high-quality office properties approached a date with the auction block. An affiliate of Carr Properties and a joint venture of Office Properties Income Trust and AEW are among those facing distress.

Holden Walter-Warner

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