Worldgate Centre, the Herndon shopping center anchored by the AMC Worldgate 9 and the Worldgate Athletic Club & Spa, is scheduled to be sold at a foreclosure auction on Monday, October 26. The auction will take place outside the Fairfax County Circuit Court, according to a legal notice first reported by the Washington Business Journal on October 5.
The owner, an affiliate of McLean-based commercial real estate firm Rappaport, still owes about $50 million on a $65 million loan taken out in 2016. In December 2024, the owner told its lender it “no longer intended to fund the loan and desired to give up ownership of the property,” according to a court filing quoted by WBJ.
The center itself is close to full. About 30 businesses occupied nearly all of its 229,326 square feet as of mid-September, and two new restaurants are preparing to open there. An unpaid loan sent it to auction.
The owner stopped paying in 2024, and the lender moved to take the property
Worldgate Centre Owner LLC borrowed $65 million against the center in 2016. Wells Fargo originated the loan and placed it in a pool of commercial mortgage-backed securities, or CMBS, which bundles many property loans together and sells shares of the pool to bond investors.
The loan came due in May 2024. The owner could not repay it, so the two sides signed a forbearance agreement, a deal in which a lender holds off on enforcing a loan for a set period, that extended the deadline through July 2026. Responsibility for the loan then passed to Rialto Capital, a special servicer, the firm a CMBS pool hires to manage loans that have gone into default.
In February 2026, the lender asked the Fairfax County Circuit Court to appoint Colliers International as receiver, a neutral manager who runs a property and collects its rents while the lender and owner sort out the debt.
Gary Rappaport, the firm’s chief executive, signed on as a personal guarantor of the loan, but only for specific misconduct such as fraud, gross negligence or interfering with the lender’s rights after a default. WBJ reported that none of those conditions appear to apply here. Representatives for Rappaport declined to comment to WBJ, as did an attorney for the loan’s trustee.
The center still earns money, but its appraised value fell 73 percent
Worldgate Centre generated nearly $5 million in revenue and $2.91 million in net cash flow last year, according to loan servicing data cited by WBJ. Its appraised value fell from $88.5 million in 2014 to $23.9 million in March 2026.
WBJ attributes the drop in part to the loss of Sport & Health, which operated a club of more than 106,000 square feet at Worldgate. Reston Now described it in 2021 as one of the largest fitness clubs in the Washington area, with indoor tennis courts, a 25-yard pool and a spa. Sport & Health’s management of the club ended on February 15, 2021. The company’s Worldgate entity filed that year for Chapter 7, the form of bankruptcy that winds a business down, and the center’s owner later sued for more than $27 million in rent and related fees.
Rappaport took over the space and rebranded it as the Worldgate Athletic Club & Spa, which the firm owns and operates. The club remains the center’s largest tenant, so the biggest space in the building now holds a business run by the owner’s own company rather than an outside tenant.
About 30 businesses operate at Worldgate, and two more restaurants are on the way
Rappaport’s leasing table for the center, as of late September, showed one vacancy of about 1,440 square feet and these tenants:
- Anchors: the AMC Worldgate 9, a nine-screen theater that opened in 1990 as the Loews Worldgate (38,238 square feet), the Worldgate Athletic Club & Spa (106,606 square feet) and TGI Fridays.
- Restaurants: Inchin’s Bamboo Garden, Sushi Mori, Charred, Pho 2000, Anatolian Bistro, Nan Thai, Uncle Jalapeno, Hangry Joe’s Hot Chicken, Chicago Pizza with a Twist and Subway, plus Cold Stone Creamery, ShareTea and Weird Brothers Coffee.
- Services and classes: Russian School of Math, Bach to Rock, Dentistry for Children, Pivot Physical Therapy, The Jackson Clinic, Sandy Spring Bank, a FedEx Office, a dry cleaner, a barber and a nail salon.
Peruvian Charcoal Chicken & Grill installed its sign and posted hiring notices in September, and Kinnera Bar & Grill, a South Indian restaurant, plans to take over the space now occupied by Kalpasi Chettinadu Indian Cuisine. Neither has announced an opening date.
A trustee’s sale moves the property without a lawsuit
Virginia handles most foreclosures through a trustee’s sale, a nonjudicial process that runs under state law and the loan’s deed of trust (the document that pledges a property as security for a loan) instead of through a court case. The trustee named in the deed of trust advertises the sale in advance and conducts the auction, in this case outside the Fairfax County Circuit Court. Baker Donelson’s overview of Virginia trustee’s sales describes the notice and publication rules.
The new owner’s deed will go on record in the county’s land records, and the trustee has six months after the sale to file an accounting of the proceeds with the Fairfax County Commissioner of Accounts.
Whether a lease survives a foreclosure depends on its terms, including whether the tenant signed a non-disturbance agreement, a promise from the lender that a future owner will honor the lease. A center that produced $2.91 million in net cash flow last year gives a buyer a strong financial reason to keep paying tenants in place.
A lender also sold Monument III, the office tower down the street, this spring
In April, Santander Bank sold Monument III, a 13-story, 193,000-square-foot office building at 12930 Worldgate Drive, to New York-based Crown Properties for $28 million, WBJ reported in May. Santander had taken control of the building in 2024. Its previous owners paid $40 million for it in 2017.
A few blocks away, the two office buildings at 13100 and 13150 Worldgate Drive are coming down to make room for 458 homes, including townhouses and stacked condos by NV Homes. Developers built the Worldgate corridor as an office and retail district starting in the late 1980s. Monument III sold this spring for 30 percent less than its 2017 price, and Worldgate Centre’s appraised value has fallen 73 percent since 2014.
Nearby homeowners should watch who buys the center and what the buyer proposes
The townhomes, condos and apartments around Worldgate Drive and Elden Street sit within walking distance of the theater, the gym and the restaurants. As long as the tenants keep operating, daily life near the center does not change.
A buyer who pays a fraction of the 2014 value has room to spend on renovations or new tenants. The lower price could also make a partial redevelopment worth studying, as happened on the office side of Worldgate Drive. Any change in use would go through Herndon’s public zoning and design review, with hearings before the Planning Commission and Town Council.
The athletic club fills nearly half the center, and after the sale it will answer to a landlord other than the company that runs it.
Watch the auction, the deed and the two restaurant openings
- Monday, October 26: the scheduled foreclosure auction outside the Fairfax County Circuit Court.
- The weeks after: a new deed in the county land records naming the buyer, whether that is an outside investor or the lender.
- Within six months: the trustee’s accounting of the sale with the Commissioner of Accounts.
- This fall: opening dates for Peruvian Charcoal Chicken & Grill and Kinnera Bar & Grill, which will show whether leasing continues through the ownership change.
We will update this post after the auction. If you own a home near Worldgate and want to talk through what a new owner could mean for your neighborhood, reach out to us.
See something missing or wrong? Email us at [email protected] and we will check it and update the post.
