It’s not easy to watch $64M evaporate.
But that’s what Doug Donatelli did last month when he and his partners decided that selling a downtown D.C. office building for $36M that they had bought for $100M was the smarter decision than putting more money into the asset.
“We would love to have seen a signal from the market telling us it made more sense to make the investment than to bail, but that signal was never there,” said Donatelli, co-founder of DSC Partners.
The sudden disappearance of nearly two-thirds of the building’s value was difficult for Donatelli, the former CEO of First Potomac Realty Trust and a 35-year veteran of D.C.’s office market. He had seen a clear path to adding value when he bought it in 2018, but his firm is far from alone in mistiming the market.
A string of investors has been wiped out in recent months by the most dramatic disruption to the city’s office market most commercial real estate professionals have ever seen.