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The Chinatown home of Tony Cheng’s Chinese & Mongolian Restaurant is on the market once again.
The 17,655-square-foot, three-story building at 619 H St. NW in Washington is listed for sale with an asking price of $4.8 million. Marty Zupancic and John Slowinski of Marcus & Millichap Inc. are marketing the property amid a Chapter 7 bankruptcy.
The restaurant, a staple of Chinatown’s dining scene for decades, sits near Capital One Arena and the Gallery Place-Chinatown Metro station. It remains open.
The property is subject to D.C.’s specialized zoning that is intended to promote high-density residential development for the Chinatown neighborhood. The building has “significant development potential,” according to a flyer from Marcus & Millichap.
The brokers didn’t return a request for comment, nor did Cheng or his attorney, Ronald Jay Drescher.
This is the second time in as many years the building has looked ready change hands. An auction was set to take place last spring after Cheng & Co. LLC, the building owner and a business entity affiliated with the restaurateur, allegedly defaulted on a loan it took out in 2012 backed by the three-story office building.
The LLC filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for D.C. last April a few days before the building was set to be auctioned off.
That case has been converted to Chapter 7 liquidation, and Wendell Webster was appointed Chapter 7 trustee. The property has an assessed value of more than $5.9 million, according to the D.C. Office of Tax and Revenue.
The initial bankruptcy filings from April listed $7.95 million in total liabilities. United Bank is the largest creditor with $3.39 million owed, followed by Lancaster, Pennsylvania-based Yellow Breeches Capital LLC, which was owed about $2 million. Other creditors, according to the filing, include EagleBank, the D.C. government and the U.S. Small Business Administration.
In 2015, the Cheng LLC was tied up in a legal dispute with Monument Realty over complex negotiations to sell 619 H, along with 608, 610 and 614 Eye streets NW, according to court documents, all related to Monument’s Chinatown acquisition and development strategy that had suggested a redevelopment was in the works on the site but did not move forward.
Restaurants, especially those downtown, have been challenged with the decline of office workers during the pandemic. Planners have looked at Chinatown in particular as an area where new planning could enliven quieter streets. Adam Stein-Sapir, managing member of bankruptcy firm Pioneer Funding Group LLC, said the pandemic has upended many restaurant businesses, making it less likely this site will be sold just for a new restaurant use.
“This is one of those situations where you have a business that is asset-rich but cash-poor,” Stein-Sapir said. “The land has a lot of value but the business in there is not generating enough income to support the debt against the building. The value is probably more in the hands of a developer.”
Read More at Washington Business Journal.
View 619 H Street NW.
Marcus & Millichap is the nation’s largest brokerage firm focused exclusively on investment sales. It is based on a simple premise: matching each property with the largest pool of pre-qualified investors. With over 2,000 investment sales and financing professionals located throughout the United States and Canada, Marcus & Millichap is a leading specialist in commercial real estate investment sales, financing, research, and advisory services. Founded in 1971, the firm closed 8,954 transactions in 2020 with a value of approximately $43 billion. Marcus & Millichap has perfected a powerful system for marketing properties that combines investment specialization, local market expertise, the industry’s most comprehensive research, state-of-the-art technology, and relationships with the largest pool of qualified investors. To learn more about the company, please visit www.MarcusMillichap.com.