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THE COMMUTERS HAVE LEFT-AND THEY AREN'T COMING BACK. INTEREST RATES ARE SOARING. CITIES ARE LOSING HUGE SUMS IN TAXES. IT'S AN URBAN CATASTROPHE OF UNPRECEDENTED PROPORTIONS. HERE'S WHAT THE SMARTEST MINDS IN REAL ESTATE ARE DOING ABOUT IT.

- GIACOMO TOGNINI AND RICHARD J. CHANG

As millions of Americans stayed home to avoid Covid-19 in 2020, one of the most iconic buildings in the nation's capital, Union Station, sat virtually empty. The Beaux Arts-style rail terminal with offices and retail space was one of the jewels in the real estate portfolio of billionaire Ben Ashkenazy (net worth: $2.6 billion), who purchased an 84-year lease on the property for $160 million in February 2007.

The lack of passengers quickly took its toll. In May 2020, Ashkenazy defaulted on $430 million in loans on the station that he had refinanced in 2018, according to court records in a foreclosure lawsuit filed against him by the lender, New York-based Rexmark. Seven months later, Ashkenazy lined up a deal with an unnamed sovereign wealth fund to take a 50% stake in the terminal for more than $700 million. But that deal collapsed in 2021-and in another twist, Amtrak moved to take over Union Station for $250 million via eminent domain in April 2022.

Now the landmark is at the heart of a legal battle between the federal government, Ashkenazy and Rexmark, which maintains that it purchased Union Station for $140.5 million at a foreclosure auction last June. One thing is certain: The commuters aren't coming back. Amtrak's annual passenger numbers decreased from more than 5 million in 2019 to 1.8 million in 2021, a 66% drop. Ridership on two key routes through Union Station dropped 26% to 9.2 million through 2022.