Notes: Patent and Trademark Office downsizing puts Alexandria's largest landlord in hot water

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Notes: Patent and Trademark Office downsizing puts Alexandria’s largest landlord in hot water

ALXnow.com Today at 8:45am

Credit rating agency Moody’s Investors Service said the U.S. Patent and Trademark Office (USPTO) property is at high risk of default, the Washington Business Journal first reported.

The downgrade comes after the USPTO announced it would downsize its office space in Alexandria. Like many office building owners, LCOR Alexandria LLC has struggled to find tenants to fill that space.

Moody’s bumped the credit rating on the $60.2 million bond down to Caa1 — investor speak for a junk rating, according to the more business-savvy reporters at the Washington Business Journal.

According to Moodys:

The underlying rating downgrade to Caa1 reflects the high risk of default on the senior debt as early as December 2024, when the borrower will likely be unable to make its full principal and interest payments. In that event, the bond insurance policy will be triggered to fully cover the $10.1 million mandatory sinking fund redemption. The increased risk of default is largely due to the inability, to date, of the owner/borrower to secure new tenants in the two buildings on the USPTO headquarter campus that will become vacant after August 2024. Absent new tenants, shell rent on the three remaining buildings occupied by USPTO will not be sufficient to cover senior debt service in full.

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