The giant Hecht’s Warehouse on New York Avenue NE was one of the more notable failures of the real estate boom and bust: Patriot Equities bought the site for $77.5 million in 2007, dreaming of new mixed-use life for the old art deco building. But the firm couldn’t keep up with interest payments on a $66 million loan from U.S. Bank, the dispute went through nasty litigation, and the building went into foreclosure last year, only to have the sale called off at the last minute.
Well, it’s on the block again next Wednesday, and likely won’t be postponed again. Why? U.S. Bank is out of the picture—-it sold the promissory note on the loan to Douglas Development at the end of March, secured by the Army and Air Force Mutual Aid Association. So Douglas is the one that’s foreclosing on the property, claiming outstanding debt of $44.1 million, according to the notice.
That doesn’t mean Douglas actually wants to develop the site. At the auction, it could do a few things: Bid just enough to gain control of the title, which would make them the majority owner. Or, Douglas could accept a higher bid from some other prospective owner and make a tidy profit (which it could then use to pay off debts on other buildings!). I’ve reached out to their people, and will update if I hear back. Stay tuned!