DoD has renewed the 235,983 SF of office space it leases at 400 Army Navy Dr. in Pentagon City from Lerner. Mett Miller, Julie Rayfield and Todd Valentine of Studley repped GSA in the five-year lease.
DoD is still on the market for more space in Northern Virginia, GVA Advantis’ Tonya Ginter tells us -- a healthy 210,000 SF in fact -- which it hopes to close by this summer. Other government agencies seeking large-sized leases, she says, are the National Institutes of Health, which is looking for 500,000 SF in Rockville for Summer 09 and the Agriculture Department, looking to lease 330,000 SF in DC by early Fall 2010.
Graebel has leased a 75,000 SF distribution facility in ProLogis Park Gateway. The lease brings phase two of the company’s planned 716,000 SF project to full occupancy. At full build out the park, which is located close to Dulles airport, will have nine buildings – all of which will be LEED certified.
Washington Property has reached full occupancy in two of its Maryland offices. Lockheed Martin added 2,752 SF at 4 Research Place in Rockville, bringing its total square footage there to 38,251 SF. Bernie McCarthy of Jones Lang LaSalle represented Lockheed Martin, and Marc Witowski, VP of Leasing at WPC, repped for the company. At Patriot East in Greenbelt, JMAT Systems took 2,806 SF. Bill Ompofo of Avalar Realty represented JMAT and Brent Prossner of Edge Commercial joined Witowski in representing WPC.
Finesa Real Estate in Rockville has teamed up with L&B, an institutional investment advisor in Dallas, to recap one of its Maryland multifamily portfolios. The recap -- $27.1 million in JV equity – will help the company transition the $100 million portfolio to a value-add strategy, Finesa’s Andres Gonzalez tells us. Gonzalez, along with Diego Sanint, operates the private equity fund.
The portfolio is comprised of close to 1,000 garden-style apartments in Frederick and Prince George’s counties. A package that totals 731,976 SF, the portfolio has been a buy-and-hold investment up until now. The National Harbor, though, is changing that.
Two of the larger assets in the portfolio are very close to the sprawling project, Gonzalez explains. “National Harbor is changing the submarket’s demographics and there is a huge opportunity to upgrade and attract a different kind of tenant now.”
L&B replaced a fund backed by foreign high net worth individuals – Finesa’s main style of investor to date. L&B’s majority ownership of this portfolio is the first institutional backing Finesa has received, Gonzalez says. Right now the company is not looking to recap any of its other portfolios, he adds.
CBRE’s Maury Zanoff and Joseph Donato from the company’s Capital Markets Group helped Finesa in structuring the new equity JV.
COPT has closed on a $225 million construction loan facility funded by KeyBank, BoA,and Manufacturers and Traders Trust. The IO-payment facility has been structured with a three-year term plus one-year extension option. COPT says the interest rate is based on a pricing grid that is dependent on its leverage, with the initial interest rate Libor plus 160 basis points. The facility can be expanded to up to $325 million at a future date. COPT will be using this to fund most of its construction costs over the next several years.
4221 Walney Road in Chantilly has traded for $8.7 million, at a 7.85% cap rate. The 28,161 SF office building was acquired by local investors from Adler Financial. Virginia Commerce Bank is the main tenant, occupying 71% of the building. Brian Ball and Jack Regler from GVA Advantis repped the seller.
It’s looking more and more like a tenants’ market in DC. According to a recent report from Studley, the number of 100,000 SF contiguous blocks of space available at the end of Q1 has nearly doubled to 21 from 11, compared to a year earlier.
Laurent Myers, executive managing director at Studley, tells us he is starting to see more landlords grant generous concessions in response to the slowing velocity. Some landlords are offering rent abatements of six months. Others are allowing tenants to push out their occupancy dates in order to lock-in their lease. A more generous TI allowance and expanded rights in the lease are other examples.
“Landlords are hedging bets to make sure they have a tenant in place before the end of the year, rather than insisting on a deal right now,” he says.
Still, Myers adds he hasn't seen too many landlords compromise on actual rates, largely because the financing and building valuation would not permit that. Also, he’s not calling this a solid trend in the area, at least not yet. “It’s still too new of a development.” Tenants that wait too long could still find they have less quality space available from which to choose, he says.
Lowe Enterprises of Los Angeles is investing $28 million in its Century Center complex in Crystal City to renovate the duel, 13-story towers. Lowe is refurbishing the lobbies and other public spaces, the entrances and the facades in the two buildings, which consist of more than 560,000 SF of office and 70,000 SF of retail. Construction will be complete this summer.
This Friday the American College of Surgeons will break ground on its $107.6 million office at 20 F.
Credit Where Due
Last week we reported that HFF brokered the sale of 1750 K, which Sumitomo acquired in cash from Bernstein Cos. for $76 million. We meant to say that both Dek Potts and Jim Meisel brokered the deal.