New Owners Emerge for Distressed L’Enfant Plaza Office Building

 

Featured in:  Washington Business Journal

By:  Daniel J. Sernovitz

Normandy Real Estate Partners cast the winning bid for 950 L’Enfant Plaza at a foreclosure auction.

A New Jersey-based developer is weighing plans to breathe new life into an aging L’Enfant Plaza office building after acquiring the real estate at a foreclosure auction Wednesday.

Normandy Real Estate Partners cast the winning bid with a $38.5 million offer for 950 L’Enfant Plaza SW, according to sources familiar with the deal. Alex Cooper Auctioneers oversaw the bidding. The outcome wasn’t entirely unexpected, as Normandy held the debt on the property and initiated the foreclosure auction to collect an outstanding balance of nearly $101.5 million.

Normandy principal Patrick Keeley, in an email, touted the 285,305-square-foot building’s proximity to D.C.’s Southwest waterfront, including The Wharf, and the L’Enfant Plaza Metro station as selling points to help position the building for new tenants. The building is more than 80 percent leased to a mix of mostly federal agency tenants.

“We are thrilled to acquire this iconic building,” Keeley said.

Normandy has amassed a portfolio of nearly 2.5 million square feet in Greater Washington over the past four years, including the National Press Building and 1015 18th St. NW. It moved to foreclose on 950 L’Enfant Plaza after its former owner, an affiliate of New York’s Heyman Enterprise, defaulted on a loan it took out on the property prior to the recession.

The debt was part of a pool of commercial mortgage-backed securities taken out in the lead-up to the recession, and most of those 10-year notes have come due over the past year or so. Many of the properties tied to those debts have either been refinanced or sold at auction, but some, like the Fannie Mae-leased 4000 Wisconsin Ave. NW, remain to be worked through.