The Watergate Hotel in Washington, part of the complex made famous by the political scandal that brought down President Richard Nixon, sold in a foreclosure auction to mortgage holder PB Capital Corp.
New York-based PB Capital paid $25 million for the property. Former owner Monument Realty LLC owed the lender $40 million and defaulted on the mortgage. There were no other offers for the 250-room hotel at 2650 Virginia Ave. NW, according to sale supervisor Alex Cooper Auctioneers Inc.
Monument, based in Washington, bought the Watergate in 2004 and planned to turn it into apartments, said Bob Persico, managing director of PB Capital. The building has been empty since 2007. PB Capital will sell the property after making sure there are no title issues, he said.
“We’ve had a lot of interest already,” Persico said in an interview, declining to identify potential buyers. The building will be sold as a vacant property, he said.
U.S. hotel revenue and occupancy are falling in the recession. Occupancy in Washington declined to 74 percent in the year through May, said Rick Gates, senior vice president at hospitality research firm PKF Consulting in Alexandria, Virginia. Average daily room rates fell to $217.50 from $218.50.
The Watergate Hotel sale didn’t include three apartment buildings with about 600 units and two office buildings in the complex.
About 10 registered bidders attended today’s auction, each with a $1 million cashier’s check, said Paul Cooper, vice president for Alex Cooper Auctioneers in Washington. None increased PB Capital’s opening offer of $25 million, he said.
/ Source: Bloomberg
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