Barrie tells GlobeSt.com that the largest note of $140 million has already been marked as delinquent for June, so more than likely Skyline will be making a repeat appearance on Trepp's monthly list.

As for the rest of the debt associated with the portfolio, it is difficult to gauge when it will be marked delinquent, if at all, Barrie adds. Vornado has put the portfolio on the market for sale.

The 100-acre, mixed-use corporate park in Northern Virginia was once a destination for US government contractors. However, in the aftermath of the Defense Base Closure and Realignment Commission's decision several years ago to pull out of these local markets, the place all but emptied out as tenants declined to renew their leases. In the last two years alone, the portfolio lost two large tenants totaling 272,704 square feet.

Today half of the 2.5 million square feet of office space at Skyline is empty.

Vornado Eyes an Exit for Its DC Holdings

The portfolio is one reason—but not the only one— why Vornado has repeatedly said it is considering spinning off its Washington DC holdings, which include Skyline but also other properties that are performing well.

CEO Steven Roth understands the reasons for Skyline's decline but what he has difficulty grasping is why the rest of the market's vacancy rates remain stubbornly high, in his opinion. As he wrote shareholders recently in his annual letter:

Washington has been a victim of the US Government's Department of Defense Base Realignment and Closure Statute move-outs, limited government growth in the Capital District, and a generally all around soft real estate market. Confoundingly, Washington has the lowest unemployment rate in the nation, the most educated work force in the nation, coupled with the highest vacancy rate in the nation; something doesn't add up.

Vornado Realty did not respond to a request for comment from GlobeSt.com.

WASHINGTON, DC—Vornado Realty Trust's $678 million Skyline Portfolio was among the five largest CMBS loans that went delinquent in May, according to Trepp's monthly list of top CMBS deliquencies.

The portfolio is backed by eight offices in Falls Church, VA, but only a few slices of the debt are currently marked as delinquent, according to the post, which was written by research analyst Sean Barrie.

These were the $105-million A notes that back GECMC 2007-C1 and JPMCC 2007-LDPX, both of which have been marked as 30 days delinquent. The Skyline portfolio was transferred to special servicing in April due to an imminent monetary default.

The Largest Note Will Be Marked Delinquent in June

Barrie tells GlobeSt.com that the largest note of $140 million has already been marked as delinquent for June, so more than likely Skyline will be making a repeat appearance on Trepp's monthly list.

As for the rest of the debt associated with the portfolio, it is difficult to gauge when it will be marked delinquent, if at all, Barrie adds. Vornado has put the portfolio on the market for sale.

The 100-acre, mixed-use corporate park in Northern Virginia was once a destination for US government contractors. However, in the aftermath of the Defense Base Closure and Realignment Commission's decision several years ago to pull out of these local markets, the place all but emptied out as tenants declined to renew their leases. In the last two years alone, the portfolio lost two large tenants totaling 272,704 square feet.

Today half of the 2.5 million square feet of office space at Skyline is empty.

Vornado Eyes an Exit for Its DC Holdings

The portfolio is one reason—but not the only one— why Vornado has repeatedly said it is considering spinning off its Washington DC holdings, which include Skyline but also other properties that are performing well.

CEO Steven Roth understands the reasons for Skyline's decline but what he has difficulty grasping is why the rest of the market's vacancy rates remain stubbornly high, in his opinion. As he wrote shareholders recently in his annual letter:

Washington has been a victim of the US Government's Department of Defense Base Realignment and Closure Statute move-outs, limited government growth in the Capital District, and a generally all around soft real estate market. Confoundingly, Washington has the lowest unemployment rate in the nation, the most educated work force in the nation, coupled with the highest vacancy rate in the nation; something doesn't add up.

Vornado Realty did not respond to a request for comment from GlobeSt.com.