Coast Guard Headquarters Will Be Seeking New Tenants

Investcorp Real Estate Credit Fund has sold a $100 million first mortgage loan backed by the building that has been the long-standing Washington, D.C. headquarters of the U.S. Coast Guard. Investcorp sold the mortgage, which is due in 2014, to Talos Capital Limited for an undisclosed amount. The transaction drew strong interest among investors in light of the stability of the tenant and the demand for real estate in Washington, D.C.

According to a press release, the transaction will help Investcorp offset uncertainty surrounding the Coast Guard’s intention to renew its lease. The Department of Homeland Security, within which the Coast Guard resides, has indicated that it may consolidate offices onto a new campus.

Investcorp acquired the mortgage for the current Coast Guard headquarters in 2009. “We were fortunate to be a buyer during the market downturn, when forced selling by financial institutions depressed prices, even for properties with a secure tenant providing a reliable cash flow,” said Chris Sameth, a principal with Investcorp. “Today, we have a chance to take a very solid profit before we have to consider making additional investments to attract a new tenant when the Coast Guard’s lease expires.”