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September 11, 2008
The Deal Sheet
(our more serious side)

Investment Sales

WRIT paid $58.3 million, or $155,750 per unit, for an apartment building in Chevy Chase called the Kenmore. A former Archstone-Smith asset, the Kenmore is a 374-unit, 270,000 SF building at 5415 Connecticut Ave., currently 96% leased.
WRIT says it expects to achieve a first-year, unleveraged yield of 6.2% on a cash and GAAP basis, for the acquisition, which was funded with a combination of cash and a line of credit. RW Baird, which follows WRIT along with several other DC-based REITs, likes the transaction, noting that it reflects WRIT’s ability to snap up high-quality assets at attractive pricing. “The cap rate compares favorably to recent suburban apartment dispositions out of the same portfolio, which were sold at an estimated 5.75% cap rate,” the research note said.

WRIT is also marketing the Avondale, a 236-unit apartment property in Laurel. The research firm has modeled a 4Q closing and an estimated sales price of $23 million for that deal.


Guardian Realty Investors bought 1401 K for $53.8 million, or $432 SF. Bill Collins, Paul Collins, Drew Flood, Jud Ryan and James Cassidy of Cassidy & Pinkard Colliers represented the seller in the deal, AEW Capital Management LP. The 124,706 SF building is fully occupied.


FCP has acquired a 242-unit apartment building in Hyattsville called Toledo Plaza for $18 million, or $74,000 per unit. The company will be investing an additional $6.5 million to rehab the 22, three-story buildings that make up the complex. FCP acquired the property for its recently formed private equity fund that is packing $900 million in purchasing power. Targeted areas of investment are multifamily in the Mid-Atlantic. For this particular acquisition, FCP tapped a $75 million line of credit.


Some two weeks after it launched marketing efforts for eight Pep Boy locations in DC, Florida and the Mid-Atlantic, Calkain Companies has two under contract in the DC region, another letter of intent on a site in Orlando and is expecting a LOI for a Pennsylvania Pep Boys. “We’ve gotten good action on almost 50% of the portfolio,” says Jonathan Hipp, president and CEO of Calkain. Pricing has been very tight to the asking price, he says, which the company estimated to be about $35 million total for the eight stores, or $2.6 million to $6.4 million per store. The sites are currently occupied and operated by Pep Boys at 15-year, triple net leases, with 1.5% annual rental increases.

Perseus   GVA Advantis  



Cushman and Wakefield’s Peter R. Marcin, Brian Sullivan and Lauren LeHew have inked 120,000 SF of leases at 1717 H with government agencies over the last few weeks. The trio signed on Homeland Security to occupy 60,000 SF most recently; last month Veterans Affairs agreed to lease 60,000 SF. Both deals are 10-year terms, says Marcin, who, as managing senior drector
in C&W’s Federal Practice Group, repped the building owner, Matomic Operating Co. in Washington. There is another 30,000 SF available.


AvalonBay is launching a fund that, with leverage, will have $950 million in purchasing power. The fund is kicking off with $333 million in equity commitments--$150 million of which is being provided by AvalonBay. Fund II will acquire and operate multifamily communities in high barrier-to-entry markets in the Northeast, Mid-Atlantic, Midwest and West Coast.


Five X Securities, a new broke-dealer in Oakton, is prepping to launch a $1 billion non-traded REIT that will be called Mission Residential Property Trust. The initial round of fund raising will be private equity, after which the company plans to register the vehicle and take it public. Five X Securities has tapped Washington firm Mission Residential LLC as a sponsor. David Young, principal and CEO of the company, was president and CEO of NFP Securities in Austin and president and CEO of NY Life Securities and Eagle Strategies, in New York City.


DC is looking for a development partner to rehabilitee and reposition the Park Morton public housing project – a $170 million project. Fenty has issued a solicitation to rebuild Park Morton into a mixed-income community that will have at least 500 affordable and market-rate housing units.


Marshall Burton is joining Opus East as executive vice president, from Opus Northwest’s Denver office where he was vice president and general manager.


Cassidy & Pinkard Colliers’s John F. Myers has been promoted to managing director, Maryland Leasing.  He will be partnering with Brendan Cassidy, Paul Kern and Jenna Polivka.


Green Park Financial has opened a new office in Baltimore, staffing it with Patrick Boyle, assistant vice president in the production group. Boyle is a veteran of such firms as M&T Realty Capital Corp., Mercantile Bank and J.P. Morgan Securities. He is expecting to generate some $200 million in transactions from that office over the next 12 months.


Washington Property Co. has begun demolition to build 1050 Ripley in Silver Spring, a $93 million, 17-story project. Once complete in late 2010,  it will put on the market 318 luxury condo units and 7,400 SF of retail.


NVRetail and Tetra Partners have opened Rutherford Crossing, a 400,000 SF regional retail center in Winchester, VA. Anchored by Target and Lowe’s Home Improvement stores, it is located on U.S. Rt. 11 at the northeast quadrant of the Interstate 81 - Rt. 11 interchange.


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