Note: This story was updated here to reflect the refinancing Matan Cos. secured from Eagle Bank. The loan is no longer in special servicing.
McLEAN, VA—The sole tenant in the 137,000-square foot office building located at 1750 Old Meadow Rd. will not be renewing its lease -- a development that does not bode well for the $30.5 million loan backing the property, according to Trepp's special service commentary for August.
The non-renewal apparently was a surprise to the owner, Matan Cos., which sent the loan to special servicing in June, indicating that it would not be able to refinance by the July 2015 maturity date without a lease renewal by the tenant, SageNet.
According to Trepp, in July "the special servicer notes indicated that [SageNet] was expected to renew and that the borrower had requested a maturity date extension. This month the notes included a new sentence that 'tenant is not expected to renew.'"
Matan Cos. and SageNet did not return emails requesting comment.
The last word from Trepp on the matter was that June was the last month payment on the loan had been made and "the status indicates that a foreclosure is being pursued."
Trepp's concern in this affair is how the loan will impact the CMBS that holds the loan. It could be worse, although the portion it holds is not insignificant: the $30.5 million loan makes up 12.1% of LBUBS 2005-C5.
Trepp had been watching the loan simply because the building had a sole occupant, Trepp's Sean Barrie tells GlobeSt.com. "It is pretty big when a single tenant doesn't renew."
The question is, of course, why didn't SageNet renew. The usual suspects, Barrie said, include downsizing at SageNet or it didn't like the building or its location.
On Tuesday, SageNet announced it was acquiring the cybersecurity division of Turnberry Solutions, which makes the downsizing argument a bit of a stretch, although Barrie noted that a lot of DC area firms have been downsizing in response to the federal government's own retrenchment.
SageNet is based in Tulsa, Okla. In 2013, it acquired the locally-based SpaceNet, a communications network company, from Gilat Satellite Networks.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
