Ninety-nine-unit residential complex Tribeca in Washington, D.C.’s NoMa neighborhood is headed for foreclosure, deed records show, as the debt on the building continues to snowball and its owners have reportedly been delinquent on interest payments for more than 90 days.
An entity run by D.C.-based developer Urban Investment Partners (UIP) was served a foreclosure notice for the property on May 1, records show. The 116,000-square-foot complex has an outstanding debt in excess of $41.3 million, and is set for a June 20 auction with Alex Cooper Auctioneers.
Through a joint venture with Kadida Development, Alliance Development and United Investment, UIP led the development of the building starting in 2018 with a $35 million construction loan, and the complex was delivered in 2021, records show. In 2022, the firm refinanced the debt on the building with a $39.9 million commercial mortgage-backed securities loan from MF1 Capital.
Yet according to proprietary data from Morningstar Credit obtained by BisNow, the building owners haven’t been able to cover debt service and have been delinquent on interest payments for more than 90 days. Amid the building’s financial troubles, the loan was transferred in April to CBRE Loan Services acting as special servicer, per deeds records. Attorneys June Marshall and Jerald Cohn of Holland & Knight were appointed substitute trustees late last month.
Representatives for UIP, CBRE Loan Services, and Holland & Knight did not immediately respond to inquiries about the impending foreclosure.
Located at 40 N Street NE, about 1.3 miles north of the U.S. Capitol, the Tribeca apartments were originally developed as condominiums. UIP has been leasing units at Tribeca as one- and two-bedrooms ranging from 741 to 1,202 square feet. The property was nearly 90 percent occupied late last year, BisNow reported, citing the Morningstar data, though such rental income was able to cover only about a third of the building’s debt service.
The Tribeca news comes as large residential and office buildings in the nation’s capital continue to face struggles bouncing back from COVID-19 pandemic-era lows. Clarion Partners-owned 701 Eighth Street NW in Downtown D.C. — known as The Portrait Building due to its proximity to the National Portrait Gallery — was recently relinquished to its lender in lieu of foreclosure, while the 110-unit apartment building The Lanes at Union Market is scheduled for a foreclosure auction later this month, according to deed records.
Robert Khodadadian has long had a simple philosophy about selling real estate. The way he sees it, there are approximately a million buildings in the city, and the broker that gets to sell any one among the multitude that will hit the auctioning block at a given moment is, sometimes, simply the person who happens to pitch their services to the right seller at the right time.
Robert Khodadadian, skyline properties, ground leases, off market, investment sales, Commercial Real Estate, Commercial Observer
Read MoreChannel, Distress, Finance, 40 N Street NE, Jerald Cohn, June Marshall, TriBeCa, Washington DC, Alex Cooper Auctioneers, Alliance Development, Holland & Knight, Kadida Development, MF1 Capital, United Investment, Urban Investment Partners Commercial Observer