Goldman Sachs To Foreclose On $302M Loan Tied To Columbia Property Trust Office

A more than half-million-square-foot office building in downtown D.C. is headed to a foreclosure auction.

The substitute trustee on the $302M loan backed by Columbia Property Trust’s 1800 M St. NW filed a foreclosure notice and foreclosure affidavit with the D.C. Recorder of Deeds on Tuesday.

The lenders, a partnership of Goldman Sachs, Deutsche Bank and Citi Real Estate Funding, appointed the substitute trustee last week. 

The roughly 580K SF property was scheduled for a Dec. 20 auction with Alex Cooper Auctioneers.

Columbia Property Trust declined to comment. 

It paid $421M in 2017 for the property in partnership with Allianz Real Estate. The property was built in 1975, and the previous owner completed a $33M renovation in 2016. The loan was originated in December 2021 with an initial balance of $287M. 

The building is set to lose a major tenant. Law firm Zuckerman Spaeder is moving out of its 52K SF at 1800 M to a newer office building less than half a mile away, Bisnow reported in January. 

The office tenants at 1800 M St. include Emily’s List, Cresa, the U.S. Postal Service, Wilkinson Barker Knauer, The Brattle Group and Berkeley Research Group, according to their websites. 

Miami-based taco chain Talkin' Tacos opened in its ground-floor retail space at the end of the summer. The property has about 11K SF of retail available, according to Dochter & Alexander Retail Advisors' marketing materials. 

The building is one of the two that New York-based Columbia Property Trust has remaining in D.C. after it sold Market Square near the National Mall for $323M this spring. It also owns 80 M St. SE in the Navy Yard neighborhood. Columbia Property Trust was acquired by Pimco in late 2021.

There has been a parade of large downtown office buildings sold out of foreclosure over the past year, and 1800 M St. would be one of the largest on the list.

The four buildings that make up the 888K SF L’Enfant Plaza in Southwest sold at an auction in October for $83.7M, less than a quarter of their last appraised value. Brookfield’s 383K SF property on K Street next to Franklin Park also sold to the lender at a foreclosure auction in May for $44M.

The D.C. office market has reached record vacancy levels. In the third quarter, the city's offices recorded 22.7% vacancy, according to CBRE, with a 24.7% vacancy rate in the central business district.