Assembly Real Estate and FitzWalter Capital buy $140M D.C. office loan for $79.5M

A joint venture of Assembly Real Estate and FitzWalter Capital bought the $140 million loan on 700 Sixth Street NW for $79.5 million, according to a Washington Business Journal report relayed by The Real Deal. The report said the buyers then took the Washington, D.C., building through a deed in lieu of foreclosure. The price equals roughly 57 cents on the dollar against the loan and about 51% of the building's most recent assessed value of $156.9 million.

The 306,000-square-foot building near Capital One Arena was 79% leased when the subperforming loan was marketed in April, with a weighted average lease term of 7.8 years, the report said. Two anchor tenants were then in place, and Monumental Sports Network and law firm Eversheds Sutherland are on the tenant roster. Measured against the debt price, the buyers' basis is about $260 a square foot.

Akridge developed the 12-story property in 2009 and sold it two years later to USAA Real Estate, a predecessor to Affinius Capital, whose affiliate sold through the deed in lieu. The property was refinanced in 2019 with the $140 million loan now nearing maturity.

Another D.C. office sale this year set a lower marker. WC Smith sold its headquarters at 1100 New Jersey Avenue SE to an affiliate of Onward Investors for $43 million, less than one-third of the building's $132 million assessed value, in a deal described as a short sale.

Affinius Capital has been active elsewhere: construction debt in Lexington, a $177.25 million apartment financing in the New York metro, and the sale of a 545-unit senior housing portfolio. The 700 Sixth Street trade is the reverse: an Affinius affiliate exited an office position that traces to USAA Real Estate, its predecessor, and the price was set in the loan market.