The famed Watergate Hotel, scene of past presidential scandal, received no bids at auction Tuesday.
The Virginia Avenue hotel became famous as the place where burglars broke into the adjoining Democratic National Committee headquarters in 1972. The scandal ultimately led to President Nixon’s resignation in 1974.
Lender PB Capital Corp., which holds a $40 million note on the historic hotel, opened the auction at $25 million - but none of the 10 bidders made an offer. Since the 30-day foreclosure notice sent to owner Monument Realty had expired Thursday, PB Capital took back the property.
Commercial real estate has been in a nationwide funk, with prices falling 7.6 percent in May, according to Moody’s Investors Service. Dollar volume and transaction count are both at record lows in the nine-year history of the firm’s Commercial Property Price Indices.
PB Capital Managing Director Bob Persico said the lender’s initial plan for the property is to secure it while it decides what to do, with the ultimate goal being to sell the hotel as soon as possible. Mr. Persico said he anticipates it will be at least 30 to 60 days before the lender begins to “aggressively market the property.”
Monument Realty still hopes to turn the property into a luxury hotel, saying it has interested investors willing to back it.
Mr. Persico said that despite the hotel’s landmark status, the lack of offers at Tuesday’s auction came as no surprise, since people do not usually sell property at a foreclosure sale.
“The most savvy and wise … buy property after a foreclosure sale, because [by then] the bank has taken care of any issues that might arise,” he said. “They would be going into a blind situation just going into a foreclosure sale.”