The $86.7 million loan on 2445 M Street in Washington, D.C. could be impacted by the restructuring at district-based law firm Patton Boggs, according to Trepp, which cites several publications to suggest that the future of Patton Boggs has become quite cloudy.
“CMBS investors might want to put a post-it note” on the loan, writes Trepp.
Media reports say that Patton Boggs has been dropping lawyers, closing offices and considering a potential merger, and a headline this week from legal industry website jdjournal.com said, “Patton Boggs Appears Headed for an End.”
Edward Newberry, Managing Partner at Patton Boggs, downplayed these reports in an interview with the Wall St. Journal on Monday, saying that his firm’s hiring of a group of advisers has nothing to do with viability.
“We’re not laying off any more people, we’re not making more head-count reductions, we’re not closing any more offices,” Newberry said. Newberry also told Reuters that “the suggestion that bankruptcy is an issue is so far from the mark as to be laughable.”
Patton Boggs occupies nearly 40 percent of the 290,142 square-foot office building at 2445 M St In Washington, D.C. through a lease that expires in 2017, according to servicer data collected by Trepp. Trepp’s report says there is only one other tenant in the building, the Advisory Board Company, which occupies 62 percent of the asset through a lease that expires in 2019.
Last May, bizjournals.com reported that Patton Boggs would sublet 19,000 square feet of its space in the building to The Advisory Board Co. (NASDAQ: ABCO) after shifting 70 back-office workers to 8484 Westpark Drive in Tysons.
Located in the West End submarket of Washington, DC, 2445 M Street is a nine-story, Class A building within walking distance of the Foggy Bottom and Dupont Circle Metro Stations, according to writ.com, the website for Washington Real Estate Investment Trust. Amenities in the building include a fitness center, two upper floors with walk-out terraces and a 235-space underground parking garage.