A Strategic Reset in Washington D.C.

In 2025, Torchlight identified a strategic opportunity to acquire a distressed senior loan secured by a 266-unit, 14-story luxury multifamily property in the Navy Yard neighborhood of Washington, D.C. The property, completed in 2008, features:

• A rooftop pool and lounge
• 217 subterranean parking spaces
• Walkability to Nationals Park, Audi Field, Whole Foods, Harris Teeter, and the Green Line Metro

As a high-quality asset in a vibrant, amenity-rich neighborhood, the property was well-positioned for improved operational performance once stabilized.

Despite strong fundamentals, the property’s performance was hindered by:

• Significant mismanagement, with 35 units offline due to missing appliances
• Constrained operations limiting cash-flow potential
• A non-performing loan and a sponsor unable to remedy the situation
• Lack of a clear path to stabilize or capture market-level performance

The misalignment between the asset’s potential and its actual performance created an opportunity for a new capital solution.

Torchlight, partnering with a New York-based vertically Torchlight acquired the non-performing senior loan at a 15% discount to the outstanding balance of $48.9M, achieving a $41.6M basis—a substantial reset relative to the borrower’s position.

Through hands-on involvement and partnership with experienced property operators, Torchlight executed a plan centered on:

• Operational stabilization and returning offline units to service
• Cash-flow enhancement through improved leasing and expense management
• Strengthened property oversight supported by a top-tier U.S. apartment manager
• Long-term value capture, supported by a favorable ground lease structure with fixed annual rent escalations

This repositioning enabled the asset to regain alignment with its strong Navy Yard market fundamentals and establish a clear path to long-term performance.