NEW YORK--(BUSINESS WIRE)--Lehman Brothers Holdings Inc. announced today that it has completed the sale of its interest in a 10-building, 3.0 million square-foot Rosslyn, Virginia real estate portfolio to Goldman Sachs & Co. Monday Properties, which originally acquired the properties in partnership with Lehman in 2007, remains in place as an owner and the operator of the portfolio.
“Early on in the bankruptcy process, we had determined that the portfolio’s unique blend of well-leased operating assets with as-of-right redevelopment potential and a fully-entitled development site would be poised to attract significant interest from core capital providers when the real estate and capital markets improved,” said Jeff Fitts, a managing director at professional services firm Alvarez & Marsal who heads Lehman’s real estate group. “We spent the next three years with our joint venture partner and operator, Monday Properties, aggressively managing occupancy, starting the construction of 1812 N. Moore and preserving flexibility in our capital structure. This transaction is another example of our executing the sale strategy we laid out at the beginning of the year and has enabled us to achieve a strong result for our creditors.”
“Lehman’s strategic capital infusion in 2010 both eliminated the market’s speculation that the portfolio was distressed and prevented the partnership from encumbering the assets with expensive, structured financing available at that time,” added Ashish Gupta, a senior vice president in the Lehman Brothers real estate group. “We aptly shifted the focus to the strong intrinsic value of the real estate, vastly improved the liquidity of our ownership interest, and ultimately delivered a sizeable return to our creditors on account of their 2010 investment in the portfolio.”
Anthony Westreich, Chief Executive Officer, Monday Properties, said, “Lehman Brothers has been a valued partner of Monday Properties, and we are pleased now to have Goldman Sachs as our new partner in this exceptional property portfolio. This portfolio is unique in having core, value add, redevelopment and new development assets. It represents 30% of all commercial real estate in Rosslyn, including the trophy properties 1000 and 1100 Wilson Boulevard, and is currently 92% leased.”
The sale was arranged by Eastdil Secured and previously approved by the bankruptcy court on August 17, 2011.