Pakistan sells Washington-based historic former embassy building for $7.1 million

Pakistan has sold a historic building in the heart of Washington, DC for $7.1 million. The property had been vacant since 2003 and was finally taken off the government's hands by Pakistani businessman Hafeez Khan.

The building, which was formerly owned by the Pakistan Embassy, was put for sale a few months back, after it underwent a change in its property classification. The News reports that the historic building was downgraded to blighted status by the District of Columbia, which ultimately resulted in increased taxes on its assessed value.

A crumbling building

Add WION as a Preferred Source

According to the report, the now-crumbling building underwent a change of class status and was put up for auction last year.

The well-known R Street building, which previously functioned as a chancery, attracted three bids. However, the bidding process was reportedly abruptly cancelled by Pakistani authorities without providing any explanation.

The highest bid received at that time was $6.8 million, while the pre-auction evaluation benchmarked the building's value at $4.5 million.

Having remained unoccupied for over a decade, the building lost its diplomatic status in 2018, making it subject to local government taxes.

A class 4 building

Earlier this year, the local authorities further downgraded the property status, classifying it as Class 4 — taxed at $10 per $100 of assessed value — due to its deteriorated condition, which added more burden to the national finances.

The Department of Buildings of the local government determines a building as blighted if it poses a threat to health, safety, or general welfare. Factors considered include whether the building is boarded up, if doors, windows, and other openings are secure, if exterior walls are free from damage, graffiti, and decay, and if exposed metal and wood surfaces are protected.

Official documents reveal that the Pakistani government did not receive any tax relief on the property from 2018 onwards.

Initially classified as Class 2 from 2018 to 2019 due to its commercial nature, the building was later categorized as Class 3 from 2020 to 2022 as it remained vacant. In April 2023, the property's classification was further downgraded to Class 4, reflecting its deteriorated condition.

Due to a lack of proper maintenance, the building deteriorated over time, despite former Prime Minister Yousaf Raza Gillani approving repairs through a $7 million loan from the National Bank of Pakistan in 2010.