Lender Takes Control Of Prominent Dupont Circle Office Building
The longtime owner of a 12-story office building above the Dupont Circle Metro station has relinquished control of the property to its lender.
The property at 1350 Connecticut Ave. NW changed hands last week, with Peter N.G. Schwartz Management Co. selling it to The Guardian Life Insurance Company of America, according to documents posted to the D.C. Recorder of Deeds.
The transaction had a sale price of $39.3M, according to deed records, which is the same amount Guardian Life Insurance had provided in a loan to Schwartz in December 2015. The latest transaction was recorded as a deed transfer, but a source involved with the property told Bisnow it was a deed-in-lieu-of-foreclosure sale.
Peter N.G. Schwartz President Peter Schwartz, who signed the deed transfer document, declined to comment. Guardian didn't respond to multiple requests for comment.
Along with taking control of the property, Guardian retained Colliers to lease its office and retail space, according to a LoopNet listing. Schwartz previously had CBRE and KLNB as its office and retail brokers, respectively.
The 240K SF building has roughly 100K SF of offices available, according to the LoopNet listing, putting its availability rate at 41.7%.
The building was developed in 1938 and renovated in 1988, according to the LoopNet listing. Peter N.G. Schwartz Management Co. appears to have acquired it in 1994, according to deed records.
Sitting at the intersection where Connecticut Avenue and 19th Street NW meet Dupont Circle, the building is best known to area regulars as the home of the Krispy Kreme doughnut shop. Its retail space also includes Aloha Poke, wedding store Green and Blue Studio, and the Barry's Dupont Circle gym.
Its office tenants include the National Employment Law Project, law firm Jetlaw LLC and Peter N.G. Schwartz Management Co.'s own office, according to their websites.
Prior tenants that appear to have left the building in recent years include the Eurasia Foundation, which announced a move to 1990 K St. NW in December 2019, and Avelere Health, which changed the address listed on its website from 1350 Connecticut to 1201 New York Ave. NW sometime between 2018 and 2020, according to an analysis using the Wayback Machine.
The property is the latest in a series of D.C.-area office buildings to face distress. The nearby 1850 M St. NW is scheduled for the auction block this week after JPMorgan Chase filed a notice to foreclose on the building's owner, Manulife Investment Management. Gemini Rosemont Realty defaulted on two Herndon office buildings after failing to sell or refinance ahead of its April 1 maturity date, and Monday Properties defaulted on a loan backed by a seven-building Rosslyn portfolio that had a June 9 maturity date.
This increase in distress comes as the Federal Reserve continues to raise interest rates and as lenders remain wary of putting any new money into office assets, especially in struggling markets like D.C. The city's office vacancy reached another record high of 20.4% in the second quarter, according to CBRE.
However, some other Dupont Circle office buildings in the blocks around the 1350 Connecticut property have achieved positive results after launching renovations.
Directly across the street, at 1333 New Hampshire Ave. NW, The Meridian Group in 2021 landed a pair of leases totaling 183K SF with Patient-Centered Outcomes Research Institute and American Bankers Association after investing $50M to upgrade the asset. In March, Stream Realty Partners sold 1771 N St. NW for $49.4M to the University of Southern California for its D.C. campus after renovating the 60K SF former National Association of Broadcasters headquarters building.
Emily Wishingrad contributed reporting for this story.
