PED Investments' $102 Million D.C. Veterans Affairs Building Loan Enters Special Servicing
A $102 million CMBS loan secured by 425 Eye Street NW in Washington, D.C., home to the Department of Veterans Affairs' Office of Construction and Facilities Management, has been sent to special servicing for imminent monetary default as 64 percent of GSA-leased space expires without tenant renewal.
A $102 million commercial mortgage-backed securities loan secured by 425 Eye Street NW in Washington, D.C., home to the Department of Veterans Affairs' Office of Construction and Facilities Management headquarters, has been transferred to special servicing for imminent monetary default [1]. Morningstar Credit issued the alert citing the building's large exposure to federal office leases arranged by the General Services Administration, with 64 percent of the space expiring in June 2026 [1]. The tenant's failure to provide a renewal notice 12 months before expiration triggered the default process, though PED Investments posted a $5.5 million letter of credit and was still negotiating with the GSA at the time of the alert [1].
Goldman Sachs originated the seven-year loan on December 7, 2021, at a 2.94 percent interest rate [1]. The refinancing retired $89 million in existing debt and allowed PED Investments to recoup approximately $9.6 million in equity while establishing a $2.5 million leasing reserve [1]. Goldman Sachs extended the mortgage at a 56.8 percent loan-to-value ratio based on an underwritten valuation of $180 million, with $62.4 million securitized in the $625.1 million GSMS 2021-GSA3 conduit CMBS deal [1]. The Kroll Bond Rating Agency identified the 425 Eye Street loan as the largest in that deal at 10 percent of total issuance [1].
Continue reading
3 more paragraphs for subscribers.
Free readers get a daily preview and the weekly long-form. Premium unlocks every brief in full, AM & PM editions, alerts, and the archive.