Watergate Building to Be Sold
Thursday, September 29, 2005
The owner of the office building where the Watergate break-in took place has reached a tentative agreement to sell the property to a Los Angeles real estate investment firm.
Trizec Properties Inc. recently notified tenants that it intends to sell the 11-story building at 2600 Virginia Ave. NW to BentleyForbes Acquisitions LLC.
The agreed-upon purchase price is about $90 million, according to a source close to the deal, who spoke on condition of anonymity because the sale had not been completed.
The sale will mark the third time in recent years that part of the Watergate development has changed hands. Local entrepreneur and Atlantic Monthly magazine owner David G. Bradley bought the site's other office building in 2003. Monument Realty LLC bought the Watergate Hotel last year and angered residents of the complex's three residential buildings by announcing plans to convert the hotel to luxury condominiums.
Trizec acquired the Virginia Avenue building in 1998 as part of a package deal involving other properties. The company's latest annual report to the Securities and Exchange Commission said the Watergate property initially cost Trizec around $50 million.
A spokesman for BentleyForbes in an e-mail said the company would not comment "on market speculation." Trizec spokesman Dennis Fabro also declined to comment.
"Until we close any transaction, we don't comment," Fabro said in a voice message.
However, tenants said they were asked to sign legal documents in connection with the planned sale. One such document on the letterhead of TrizecHahn Watergate Office Retail Land LLC, dated Aug. 31, said TrizecHahn, the owner of the property, intends to sell it to BentleyForbes Acquisitions.
Another document said Archon Financial LP, a subsidiary of Goldman Sachs Group Inc., intends to make a loan to BentleyForbes in connection with the purchase. "The deal has not closed yet, so there's nothing to comment about it," said Benjamin Glatzer, marketing director at Archon.
BentleyForbes's Web site says the private firm owns commercial real estate with an estimated value of more than $1 billion, including a building in Columbia. The firm was founded by members of the Wehba family, and its leadership includes C. Frederick Wehba, the chairman, and C. Frederick Wehba II, one of the vice chairmen, according to the Web site.
The elder Wehba in 1995 pleaded guilty to concealing a Beverly Hills home from the receiver of Vernon Savings and Loan Association, which collapsed and was bailed out by the government during the savings and loan crisis, according to news reports.
Wehba served three months in a halfway house in 1996 followed by about a week of home confinement, said Michael Truman, a spokesman for the federal Bureau of Prisons.