Landmark Watergate Hotel, Vacant for 5 Years, Faces Foreclosure

WASHINGTON, DC—Watergate, a name synonymous with the late President Richard M. Nixon, (bottom right photo) is in the news again.

Getting the attention this time is the 251-room Watergate Hotel, part of a six-building office complex overlooking the Potomac River in northwest Washington, D.C.

The property gained international headlines from the June 17, 1972 politics-motivated burglary that led to Nixon's resignation on Aug. 8, 1974.

The hotel is headed for foreclosure unless the lender, New York City-based PB Capital Corp., agrees to new terms with D.C. developer-owner Monument Realty, company officials confirm. PB Capital is a non-bank subsidiary of Deutsche Postbank AG.

Monument has defaulted on a $70 million loan that came due this week, another fallout from the real estate crash and the collapse of Lehman Brothers, a partner and equity investor in the property, reports The Washington Post.

PB Capital holds $40 million of the $70 million loan.

The hotel has been closed since Monument bought the property five years ago. At that time, the developer had planned to redevelop it as a luxury hotel but the residential market soured and shelved those plans, according to Michael J. Darby, (middle left photo) a company principal and co-founder.

"Monument is still committed to the Watergate," says Darby. "We still believe it's a phenomenal asset and will have the potential to be a great hotel in the future." Monument "would want to stay involved in the project if at all possible," Darby adds.

"Everyone thought this (Watergate Hotel concept) would be a home run at the time," says Dan Fasulo, managing director of Real Capital Analytics, a New York firm that tracks commercial real estate.

But the hotel may still surface as a successful asset, some industry watchers note.

"At the end of the day, it's a landmark," says Kurt Sachs, senior managing director at PB Capital. "The fact is, we have not foreclosed. There are investors with an interest in buying this. The question is, what kind of price are they offering us?"

Hoteliers Continue to Face Eroding Room Demand

ENCINO, CA--Marcus & Millichap Real Estate Investment Services Inc. reports the recession continues to erode room demand, forcing hotel owners to increasingly consider lowering their average daily rate (ADR), a strategy that will put downward pressure on revenue per available room (RevPAR).

In the months ahead, challenges will persist for owners, as many measures of economic activity indicate that further declines in room demand will occur and greater pressure will be exerted upon profitability.

Occupancy of 50 percent, often considered the minimum target threshold to attain profitability, has been equaled or exceeded on fewer than half of the days thus far in 2009, down from 73 percent in the corresponding period last year.

Supply growth, meanwhile, has contributed to the sharp downturn in property fundamentals over the past several months, and more than 130,000 additional rooms are expected to be delivered this year.

The projected increase in supply will put further pressure on owners to discount rates in order to retain market share.

On a positive note, however, challenges obtaining construction financing may defer or cancel some projects, thereby easing the effects of supply growth on other fundamentals.

For a complete copy of the company's report, please contact:

Stacey Corso, Communication Director, stacey.corso@marcusmillichap.com

Grubb & Ellis Names David Susoreny Executive Vice President, Corporate Services Group

SANTA ANA, CA– Grubb & Ellis Company (NYSE: GBE), a leading real estate services and investment firm, has named David Susoreny executive vice president, Corporate Services Group. The promotion is effective immediately.

Susoreny is a 12-year veteran of the company, having most recently served as managing director, Corporate Services Group, which provides multi market account management for corporate clients to ensure the highest level of integrated real estate services.

In this role, he will oversee the company’s Corporate Services directors as well as the company’s International, Project Management and Strategic Consulting businesses.

“David has shown a tremendous aptitude for assessing a client’s real estate needs and applying our service offerings in a way that is strategic and flexible, creating real estate programs specifically tailored to a client’s needs both in terms of geographic footprint and service requirements,” said Jack Van Berkel, (top right photo) president, Real Estate Services. “In the 12 years he has been with Grubb & Ellis, his ingenuity in servicing clients has gone unmatched.”

Contact: Erin Mays, 312.698.6735, erin.mays@grubb-ellis.com

Black & Veatch Completes Purchase of World Headquarters

OVERLAND PARK, KS--(BUSINESS WIRE)--Black & Veatch today finalized its purchase of the 11401 Lamar Avenue building in Overland Park, the headquarters for one of the world’s largest engineering, consulting and construction companies.

The purchase allows the company to begin site development, enhancement and plans for expansion, which is expected to create an economic boost for the region.

“Black & Veatch’s decision to expand in Kansas is a testament to our state’s strong business climate,” said Governor Mark Parkinson. (middle left photo) “Kansas is known for its safe communities, great schools and highly educated workforce. We’re so glad to have a global leader like Black & Veatch make Kansas the home of its world headquarters.”

Black & Veatch purchased the 11401 Lamar Avenue building for $60 million, securing part of the financing for the purchase through The Mission Bank in Johnson County, Kansas.

“The combined support of the state of Kansas and the city of Overland Park were instrumental in reaching this milestone,” said Len C. Rodman, (middle right photo) Black & Veatch Chairman, President and CEO.

“With the completion of this purchase, we can now begin to implement at our world headquarters the same types of innovative and sustainable solutions we provide every day for our clients.”

The new world headquarters (above centered rendering) will include a solar courtyard, solar canopy, bio garden and an innovation pavilion. There will also be extensive workspace, common area and facility upgrades, as well as energy management upgrades; enhancements in external landscaping; rainwater reuse systems and storm water run-off management.

When completed, Black & Veatch’s world headquarters will be LEED certified.

“Bringing these innovative and futuristic enhancements to an older facility to meet tomorrow’s design standards presents a large technical challenge, but is the most sustainable solution for the area,” Rodman added.

“It’s a challenge our professionals relish and take tremendous pride in. In addition to these enhancements, we are also planning for an additional 250,000 square-foot complex that will be built, when needed, to accommodate future growth.”

The company has piloted many of the potential design concepts at its more than 100 global offices and will draw on its LEED-certified experts and architecture, engineering and construction talent to bring innovative design concepts to the world headquarters.

“Overland Park knows the value Black & Veatch brings to the city, the state of Kansas and the entire metropolitan Kansas City area,” said Overland Park Mayor Carl Gerlach. (bottom right photo)

“Its construction plans include truly unique advancements in construction science, and a commitment to the community and environment. Congratulations to the entire Black & Veatch team on its purchase, pending enhancements and eventual expansion,” Gerlach added.

Additional Information:

Black & Veatch announced on March 23, 2009, its decision to purchase the 11401 Lamar Avenue location after a two-year real estate analysis.

The analysis included the evaluation of approximately 40 sites across the Kansas City metro region.

Black & Veatch has been the sole occupant of the building since its original construction in 1976.
The building was expanded to 600,000 square-feet in 1996 and is the largest office building in Kansas.

The building currently houses more than 2,300 of the company’s 3,800 workforce in the Kansas City metro region.

With a potential total of 850,000 square-feet of office space on the campus, the world headquarters site could ultimately accommodate a total workforce of more than 3,400.

Site development will take place from 2009 through 2010. Building enhancements are planned for 2010 through 2012. Future expansion aligns with Black & Veatch’s long-term strategy.

The Leadership in Energy and Environmental Design (LEED) Green Building Rating System is a voluntary, consensus-based national rating system for developing high-performance, sustainable buildings.