The auction of the landmark Watergate Hotel in Washington DC is generating a bidding frenzy amongst developers and real estate investors. Bidding starts at $1m on Tuesday at 10.15 am at the Wisconsin Ave offices of Alex Cooper Auctioneers.
This historic hotel - located across from the Kennedy Center and half a mile from the Lincoln Memorial – now stands desolate and abondoned to the elements, another victim of the recession which has seen hundreds of hotels going into default and being foreclosed.
Monument Realty, the current owners, have left a $40 million loan hanging around the hotel’s neck, but that’s just one part of the screw-up. The owners shuttered the hotel in 2007, and were in the process of converting the Watergate into a luxury hotel/residency complex. This $100 million makeover plan came to a screeching halt when one of the financiers - Lehman Brothers – went bankrupt last year.
The only saving grace is the hotel’s history and national landmark status. The Watergate Hotel is famed for being the place where the Watergate burglars snoozed in 1972 before breaking into and pilfering documents in the adjacent Democratic National Committee HQ office – a crime which implicated Richard Nixon and forced him to resign from the Presidency.
This historic status is attracting bidders for the hotel from all over – including local developers and international luxury hotel chains. Monument Realty purchased it for $45 million in 2004, but that figure now seems too high for the auction, which could end up anywhere between $20-30 million.
(Update: July 23, 2009 - The auction attracted 1 winning bid for $25m, and the Watergate is now owned by PG Capital - the lender who foreclosed the hotel in the first place.)