Flashbacks:
The RNGC Caddyshackpocalypse
Bollards!
Mezzanine lender Garrison Investment is moving to take control of a struggling 514,000-square-foot office portfolio in suburban Washington.Awkward! To be fair, the foreclosure impacts the building owner, not the RA. And given that a long-term tenant is among the most valuable assets in the toxic swamp that is commercial real estate, it's unlikely we'll see the RA's filing cabinets strewn along Sunrise Valley Drive anytime soon.
The four buildings, at an office park in Reston, Va., have seen their value plummet since Penzance Partners acquired them in July 2007 for $142 million. Washington-based Penzance started emptying out the 1980's-vintage buildings in order to plow millions of dollars into capital improvements and re-lease the space at higher rents. But the plan was stymied by the economic downturn, and the occupancy rate now stands at only about 45%.
In August, Penzance was unable to refinance a maturing $107 million senior loan from UBS and Garrison's $31.5 million mezzanine loan. Now Garrison, a New York hedge-fund shop, is seeking to seize the properties via foreclosure. A foreclosure auction has been scheduled for Nov. 1 in New York.
Along with Reston Corner 1, the building that houses RA Headquarters, the other properties in the portfolio are Reston Corner 2, which is currently vacant; Parkridge Center 2, which is fully leased; and Parkridge Center 5, whose occupancy rate is about 50 percent, according to the article.
So if you've got an extra $142 million
I worked for about 3 years (until last December) at a building that was also a Penzance property at Hunter Mill and Sunrise Valley. When I joined the company in 2007, the building was full and they were constructing a brand new building off of Hunter Mill overlooking the toll road. The finished that one in 2008, but it was still vacant when I left and to my knowledge is still vacant. The building I worked at saw most of the tenants leave. Out of 4 floors 1.5 were occupied. Two were completely vacant. Yet this company apparently still wanted to charge their old rates. Not sure if that is common or not, but when you have a glut of anything, isn't the price supposed to go DOWN? Obviously that's not a great thing, but getting paid SOMETHING for renting your property out is better than simply having it vacant and having zero income, right?
ReplyDeleteParkridge 1 houses the new headquarters of LightSquared and they are in discussions to lease an amount of commercial space which goes by the technical term "pantload" in the next 10-18 months.
ReplyDeleteLet's hope that RA attorney Chadwick got a non-disturbance agreement from the lenders as a condition precedent to signing the lease. That's standard procedure in commercial leasing; especially where significant tenant money is spent to fit out the space as appears to have happened in the RA space.
ReplyDeleteOtherwise, RA is at the mercy of the foreclosing lender and/or the buyer at foreclosure.
By the way, did you catch that it is a Reston-headquartered company that may bring the whole foreclosure-dependent financial system to its knees by introducing shortcuts on paperwork? See http://www.washingtonpost.com/wp-dyn/content/article/2010/10/07/AR2010100702742.html. The company is located at 1818 Library Street, which is the Accenture building in Reston Town Center.
ReplyDeleteReston as the epicenter of global financial collapse - we rule!