For a number of reasons, the Watergate has become very enticing to developers recently. And it isn’t just the prestige from owning a place that became synonymous with Washington political scandals.
The complex was completed in 1971, and many of its six buildings (including the infamous office building, completed in 1967) are begging for upgrades. Their location in Foggy Bottom not only overlooks the Potomac River and is walkable to the Kennedy Center — a unique combination — but the area around it has grown from one that was predominantly State Department folks and George Washington University students to one with more varying housing stock, a new Whole Foods and even an independent movie theater nearby. The new activity is shrinking the dead zones of Foggy Bottom and an upgraded Watergate could capitalize on that progress.
But the recent attempts at turning around both the Watergate office building and the hotel disintegrated in the recession.
A group led by BentleyForbes bought the offices in 2005, but failed to transform them into a top-of-the-line, prime address that could attract pricey tenants. Capri Capital Investors, one of the investors, eventually tried to oust BentleyForbes by suing them in Illinois (on Christmas Eve, no less) in 2009. The result is the pending sale to Pendance that we reported Tuesday.
The hotel, vacant since 2007, has been through a similar situation, with Monument Realty buying it near the peak of the market with plans to transform it into pricey condominiums, only to lose it to foreclosure when the housing market collapsed. Euro Capital Partners bought it last year for $45 million.
In making their own runs at turning around the Watergate, Penzance and Euro Capital Partners enjoy the advantage of having made their purchases at post-recession prices. But the complex already has taken its share of victims, and Nixon isn’t the only one.