Wednesday, July 13, 2011

Douglas Secures Hecht's Warehouse at Auction

With Patriot Equities having defaulted on more than $44 million for its property known as "Hecht's Warehouse", noteholder Douglas Development picked up title to the property this afternoon as the sole bidder of the auction it held through Alex Cooper Auctioneers. Douglas gained control of the title with an unrivaled bid of $20 million (a hair above the "outstanding debt in excess of $19,999,000") for the entirety of the four-parcel property spanning New York Avenue in Northeast: 1401-1403, 1545 New York Avenue NE, and 2001 16th Street, NE. Meaning, Douglas is no longer the noteholder, but the property owner, and potential developer, of the site.

The City Paper reported last week that Douglas Development had bought the promissory note for the Hecht's Warehouse property from U.S. Bank in March of this year, after Penn.-based Patriot Equities was unable to keep up with a $66 million loan, and the Bank nearly went into foreclosure last year.

Patriot Equities had purchased the Hecht's Warehouse property in 2007 for $78 million and planned a development called Patriot Yards, a warehouse facility that boasted "loading accessibility which is virtually unmatched in the District." At the time of purchase, Abdo was thrilled to have future development in the Northeast neighborhood, with the hopes it would encourage investors for its own 17-acre Arbor Place project, which never happened, nor has development of New York Avenue taken hold.

As reported by the Post on Monday, Norman Jemal of Douglas asserted that his company "is considering a warehouse distribution space at the site or possibly apartments with streetfront retail."

Washington D.C. real estate development news


Ace in Dc said...

Ha, warehouse distribution site OR condos with retail - definitely a big difference there. One will keep the area at status quo while one has the potential to revitalize and rejuvenate the entire corrido. Which one will they pick?

Anonymous said...

It was typical Abdo hubris to think he could single-handedly redevelop the area into a residential hotspot, I hope Douglas doesn't make the same mistake. In a million years I wouldn't want to live on the city's most congested artery.

Bob See on Jul 13, 2011, 4:49:00 PM said...

Awesome, a vacant building just isn't the same without a Douglas banner hanging off the side of it. Another property to start racking up back taxes. Another win for DC.

eh, good luck with this elephant. Beautiful building, nasty area.

monkeyrotica on Jul 14, 2011, 1:14:00 PM said...

So we can look forward to construction breaking ground circa 2022?

Anonymous said...

"...four-parcel property spanning New York Avenue"??? I thought "span" means to cross over? Doesn't this building "abut" New York Avenue?

Anonymous said...

Ace: He will pick both but build neither, they will change the zoning and get permits, put it for sale at an absurdly high rate, then repeat. That should keep it off the vacant list until he can wring some subsidies from DC to become the savior of NY Ave.

Anonymous said...

Yes it does cross span New York Avenue. That area along the train tracks is part of the parcel. This is DC's largest privately owned building.

Andrew on Sep 15, 2011, 12:39:00 PM said...

Using the building as a warehouse would bring jobs to the neighborhood, which is certainly something to consider.

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