Cascade North & West and Parkridge 2 & 5 comprised a four-property portfolio totaling 513,784 square feet located in Reston, just off of the Dulles Toll Road. A junior participation interest in the senior debt was acquired at an 8% discount to par, representing an attractive basis relative to replacement cost and historical sales in the submarket. Subordinate to ownership’s position in the capital stack were meaningful amounts of junior mezzanine debt and borrower equity.
The junior mezzanine debt holder eventually foreclosed on the borrower’s equity interests and later filed for Chapter 11 bankruptcy. On behalf of the senior lenders, we successfully navigated the necessary legal proceedings against the replacement guarantor and obtained all amounts owed including the full principal balance, default interest and other expenses.