Distressed Luxury Apartment Community in D.C. Changes Hands – Again – In $162.3M Deal

Senate Square, a three-year-old 432-unit apartment complex in Washington, D.C., has changed hands for the third time in less than a year, going from the developer's hands to the lender, from the lender to Westbrook Partners, which, after shelling out $124.5 million for the property, has just sold it to LaSalle Investment Management for just over $162.3 million.

June 14, 2010
By Barbara Murray, Contributing Editor

Senate Square, a three-year-old 432-unit apartment complex in Washington, DC, has changed hands for the third time in less than a year, going from the developer’s hands to the lender, from the lender to Westbrook Partners, which, after shelling out $124.5 million for the property, has just sold it to LaSalle Investment Management for just over $162.3 million.

Broadway Management completed development of Esocoff & Associates-designed Senate Square, originally conceived as a condominium project, at a cost of approximately $185 million. The downtown property occupies the former site of the National Children’s Museum within the city’s blossoming H Street Corridor, and consists of the 155-unit Concord Tower and the 277-unit Lexington Tower.

Broadway Management defaulted on the loan on Senate Square in 2009. A court appointed Douglas P. Wilson Companies receiver in October, and months later, the lender, VIII I Street Lender L.L.C., acquired the foreclosed-upon asset at auction for about $121 million–$120 million of which accounted for the outstanding note–before selling it to Westbrook. Alas, Westbrook, having paid just $124.5 million for Senate Square, turned a quick and tidy profit with the sale to LaSalle Management.

Washington, DC, has its share of distressed assets and while the Senate Square transaction marked one of the highest per unit comps to trade in DC –according to real estate services firm Cassidy Turley, which represented Westbrook in the deal–LaSalle still snapped up a premier property well below replacement cost.