You know times are bad when the Mortgage Bankers Association, the outfit that represents more than 2,000 real estate finance companies, can’t afford its own mortgage and has to dump its property at a loss.
The MBA has sold its 10-story headquarters in Washington, DC, for half what it paid for the building just three years ago.
When the association paid $79 million for the downtown DC building in 2007, the MBA — which had been leasing its previous headquarters — said it would finance the purchase by leasing out unused space.
“We have come to the inescapable conclusions that owning our own building is the smarest long-term investment for the association,” said Johnathan Kemper, the MBA CEO at the time.
Kemper is gone from the MBA and so — apparently — are available tenants for the building. According to The Wall Street Journal, only 10 percent of the spaces is leased.
So MBA dumped the property for $41 million — a $38 million loss — to CoStar Group, a commercial real estate information company that is big enough to occupy 80 percent of the building.
“It’s a quality building at a rock bottom price,” says Andrew Florance, CEO of CoStar. “We think we’ll save tens of millions of dollars over the next decade.”
And the MBA? The group that promotes property ownership through mortgage financing is shopping for space to rent.