Foreclosure Auction Scheduled For New Capitol Hill Apartment Building
The Rushmore, an apartment building on Capitol Hill that opened just before the pandemic, is headed to a foreclosure auction.
Lender Bridge Investment Group filed a foreclosure notice and affidavit on the $26.5M loan for the property at 1220 Pennsylvania Ave. SE Thursday, according to deed records.
The borrower on the loan is D.C.-based Evergreen Cos., which owns the 117-unit property and partnered with Bethesda-based SGA Cos. to develop it in 2018.
Evergreen Cos. and Bridge Investment Group didn't respond to requests for comment.
The loan totaled $23M when Bridge originated it in 2020, the year after the building began leasing.
The property is scheduled to be auctioned off at Harvey West Auctioneers on Dec. 16 at 11 a.m., according to deed records. Stuart Levin, an independent real estate lawyer, was appointed as its substitute trustee on Tuesday.
The property is in a dense retail corridor between the Eastern Market and Potomac Avenue Metro stops.
Evergreen Cos., which has affordable housing, healthcare, lending and multifamily arms, was founded by Lawrence Brown in 2013, according to his LinkedIn page. Its multifamily portfolio consists of 65 apartment buildings in the mid-Atlantic, according to its website.
At the end of 2018, Brown told The Washington Post that the Rushmore apartment building was designed for people who work on the Hill, which is the source of its patriotic — but purposefully not political — name.
“There aren’t very many newer apartments in this neighborhood where millennials can live,” he told the Post.
The building features a furnished rooftop with grills, a private dining room, a gym and package lockers. Rents were expected to be in the $2,000s upon opening, the Post reported.
A slew of newer multifamily properties have fallen into financial distress this year.
Properties that got off the ground right before or during the pandemic were burned by coronavirus-induced delays in construction, rising costs of materials and labor, followed by a year of rising interest rates. Developers that had floating-rate construction loans when interest rates were at a historic low then had to contend with much steeper rates.
Those properties became increasingly unable to refinance or pay back their loans, and as a result, lenders have forced sales, sold loans at steep discounts or foreclosed on them. Two new buildings in the quickly developing NoMa neighborhood were foreclosed on and sold this summer.
