Trepp: Several CMBS Loans Could Be Impacted by New GSA Prospectuses

5107 Leesburg Pike, Falls Church, VA

The General Services Administration has released several new lease prospectuses that could point to GSA moves, and a number of those leases could impact CMBS loans, according to Trepp.

Both chambers of Congress must sign off on the lease prospectuses, according to an article by Daniel Sernovitz in bizjournals.com, and authorizations do not necessarily indicate the GSA will vacate its current locations. Authorizations could clear the decks for existing landlords to finalize lease extensions, according to Trepp.

The first prospectus of note is for the National Institute of Health (NIH), which occupies nearly 450,000 square feet in three buildings – two in Bethesda and one in Rockville.

“One of the properties CMBS investors may have an interest in is 6701 Rockledge Drive,” writes Trepp. “The 247,000 square-foot Bethesda building is occupied solely by the NIH with a lease that ends in June 2015.”

The property backs a $54.6 million loan that matures in July 2015.

NIH’s Rockville building is located at 6100 Executive Boulevard, where data shows “an NIH lease that ends next month and a GSA lease that ends in September 2015,” writes Trepp. The property backs a $28.4 million note and the prospectus “looks to have the Institute shed about 20% of its space at a rate of $35 per square foot.”

A second prospectus for the National Institute of Health’s Office of the Director also includes 6100 Executive Boulevard, “which might explain why the GSA leases for that building are reflected as two separate leases, not one.”

Last is a prospectus for the Department of Justice, which has leases totaling 190,000 square feet at 5107 and 5201 Leesburg Pike on the table.

“These leases represent about 7% of the space at the one-time $678.2 million Skyline Portfolio loan, which is an eight-building complex located in Falls Church,” writes Trepp. “The GSA revealed in 2012 that it would not be renewing one of its leases. The note, which is split between three securitizations (BACM 2007-1, GECMC 2007-C1, and JPMCC 2007-LDP10), was later modified with a large Hope note creation.”