Alexandria Corporate Park, Alexandria, Virginia

Asset Acquired:

1st & 2nd loans secured by 270,000 square foot office property

Location:

Alexandria, Virginia

Investment Year:

2013

Equity Returned:

100%

Investor Cash-on-Cash Return:

42%

Investor annualized (IRR) return:

17.3%

Alexandria Corporate Park is a 270,000 square foot office/industrial building within the Washington DC Beltway at the confluence of the I-495, I-395 and I-95 Freeways.  The property sits about three miles from the Pentagon. G8 negotiated a highly discounted purchase of the first and second loans secured against the property from a distressed regional bank in December 2013.

Due to a near 40% vacancy rate and a prolonged period of distress, the loans exceeded the current value of the property.  Extensive efforts to create a workout solution with the borrower were unfruitful. Upon loan maturity in 2014, the loans went into default and the borrower subsequently filed for bankruptcy.  G8 worked through the borrower’s bankruptcy and completed the foreclosure in 2015, and then went to work stabilizing the asset.

In February 2016, a current tenant, the Department of Homeland Security (DHS), increased its footprint by 36,000 square feet to a total of 122,000 square feet.  G8 was further able to attract a 2nd Security Agency tenant and executed an additional 22,000 square foot expansion of space leased to the US Government for a total of approximately 144,000 square feet.  Separately, G8 located and secured a 10-year lease for the final remaining 50,000 Square feet of vacancy in August 2016, bringing the building occupancy to 100%.

In May 2017, G8 closed on a new ten-year CMBS loan.  The proceeds from the loan returned all investor capital, as well as paid an additional 42% cash-on-cash return to G8 Investors.  G8 continues to manage and distribute proceeds from the asset, now valued at more than $50 million.