Helaba loan allows sponsor to retire maturing DC CMBS loan

Landesbank Hessen-Thuringen Girozentrale (Helaba) has provided a $110 million loan to retire the existing debt on Republic Place, a 214,000 sq ft Washington, DC, office property that was tied to a CMBS 1.0 deal.

Landesbank Hessen-Thuringen Girozentrale (Helaba) has provided a $110 million loan to retire the existing debt on 1776 Eye, a 214,000 sq ft Washington, DC, office property that was tied to a CMBS 1.0 deal.

The previous securitized loan backing the property was the third largest contributor to losses on the Banc of America Commercial Mortgage Inc. (BACM) commercial mortgage pass-through certificates series 2006-3, according to a September 2015 Fitch Ratings affirmation.

Republic Place
Republic Place

The new floating-rate loan retires $90 million of debt that was scheduled to mature in April. The property was on track to generate just $3.8 million of net cash flow last year, 45 percent less than the amount needed to service the loan, according a report from Trepp-owned news service Commercial Real Estate Direct.

In September, Fitch modeled losses of 12.4 percent of the remaining pool on BACM 2006-3; expected losses on the original pool balance totalled 19.8 percent, including $216.9 million (11 percent of the original pool balance) in realized losses. As of the August 2015 distribution date, the pool’s aggregate principal balance had been reduced by 29.4 percent to $1.39 billion, from $1.96 billion at issuance.

Located just three blocks from the White House, anchor tenant The Nuclear Energy Institute moved out in 2012 and two others followed suit, reducing occupancy to 66 percent by the end of 2014.

Rockrose Development Corp. acquired the property, formerly known as Republic Place, for a reported $119 million in 2012. The borrower has completed significant renovations and is actively marketing the vacant space.

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