The $37.2 million Prince George Center II loan was recently put into special servicing according to an email alert from Fitch late last week. The loan makes up 3.89% of MLCFC 2006-1 and is backed by a 394,578 square-foot suburban office property in Hyattsville, Maryland. While the note is scheduled to mature in December 2015, the borrower may face refinancing difficulties due to the upcoming lease expiration of lead tenant GSA.
Occupying over 99% of the building, the Government Services Agency has been the main tenant in the building since 1992.The loan was previously transferred to special servicing in 2011 when it remained unclear if the US Treasury agency would secure a renewal for its lease expiration in September 2012. The GSA extended its lease and the loan later returned from special servicing in June 2012.
It appears the Prince George Center loan is challenged with the same situation yet again. Uncertainty over the GSA’s lease expiring in April 2016 has put the loan in danger of being unable to refinance at maturity. For the first half of this year, DSCR values were strong at 1.92x, which were higher than its underwritten DSCR of 1.34x.
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