Mortgage Bankers Association Underwater on their Mortgage

On Friday, CoStar Group Inc., a provider of commercial real estate data, announced that it had agreed to buy the MBA’s 10-story headquarters building in Washington, D.C., for $41.3 million. The price is well below the $79 million the trade group says it paid for the glass-walled building in 2007, while it was still under construction. The price also falls short of  the $75 million of financing that the MBA received from a group of banks led by PNC Financial Services Group Inc. for the purchase.

When the MBA announced the purchase of the building in early 2007, the trade group’s president at the time, Jonathan Kempner, said: “We have come to the inescapable conclusion that owning our own building was the smartest long-term investment for the association.”  In October 2009, however, the MBA informed its members that it had put the building up for sale. At that time, the MBA said that continued ownership of the building, which was financed with $75 million of variable-rate debt, would be “economically imprudent.”

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