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April 10, 2008
 
       
 
Deal Sheet
(our more serious side)


 

Leases

1050 K Street, an 11-story building under construction, is continuing to attract tenants eager to move into one of the few Gold LEED-designed buildings downtown. Baker & Daniels, currently at 805 15th, will be taking three floors, or 37,147 SF, in the building, which is scheduled to deliver in September. Other tenants that have pre-leased space include furniture company Knoll and two un-named tenants whose deals are still pending. Gary Stein and Nicole Miller of Studley represented Baker & Daniels. Randy Harrell, Kevin Howard and Nathan Beach of CBRE represent the owners, a joint venture between the Lenkin Company and the Tower Companies.

Just as an aside, the number of Gold LEED designed buildings in the District is growing. Also underway on K Street, for instance, is 901 K, a 261,000 SF building designed to Gold standards. Carr is the developer of the 12-story building.

Q1 Investment Sales Wrap Up

It's official. The District and surrounding areas are all experiencing slower sales and lease activities. GVA Advantis' tally of the number of office buildings that traded hands so far this year include:

In the District, 1111 19th, for $115 million ($456 per SF), acquired by ING Clarion Partners; 1000/1010 Vermont for $63.8 million ($450) acquired by Pembroke Real Estate; 1602 L, for $30.5 million ($588) by Independent Sector; 770 M, for $24.9 million ($250) by Madison Marquette; and 1050 31st, for $18.25 ($427) million by Castleton Holdings.

In suburban Maryland, 5202 Presidents Court in Frederick sold for $51 million ($219), acquired by Jack Fuchs; 1451 Rockville Pike sold for $24 million ($230) to Carr Properties; 8611 Second Avenue in Silver Spring sold for $5.5 million ($216), acquired by Symmetry at Second Avenue.

In Northern Virginia Lowe Enterprises acquired 1411 Jefferson Davis Highway in Crystal City for $76.3 million ($257) and 1421 Jefferson Davis Highway for $73.6 million ($290). 2800 Shirlington traded for $62.5 million ($302), bought by Choi Companies, LLC; 44055 Riverside Parkway on the Route 7 Corridor was purchased by Inova Health Systems for $28.7 million ($257); and 1650 Diagonal Road in Old Town for $10.1 million ($364) by AAO-HNSF.

Akridge   Land Lawyers

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According to Transwestern/Delta Associates' survey of the class A apartment market, the sector's pipeline appeared to have begun a cyclical decline in Q1, dropping to 35,659 units from 36,951 units at the end of last year. Also, it notes, there was no confirmation of class A building trades closing in Q1, although several are pending. In Q1 2007, by contrast, multifamily sales were $135 million and land, $172 million.

Financing

Jones Lang LaSalle's Real Estate Investment Banking practice has secured for the American College of Surgeons $107.6 million in financing with a trio of Chicago-based banks: Northern Trust, Chase and Third Fifth. Northern Trust took the lead in the financing, committing to the transaction even if the other two banks were to pull out.

Martin Kamm, Stephanie Lynch and Brandon Flickinger from JLL placed the deal.

The collateralized loan will fully finance the build-to-suit, 165,000 SF building the ACS has planned in Capitol Hill at 20 F Street. Northern Trust is using the organization's balance sheet as collateral, which is how it was able to land 100% financing, Lynch explains. ACS will be closing on the site, which it acquired from Boston Properties, within 30 days and has hired Boston to be the fee developer for the 10-story building.

ACS will occupy the top of the building; affiliated surgical groups are taking space on another floor. JLL's John Doub and Andy O'Brien will be leasing the remaining 130,000 SF of space available there. Boston Properties is breaking ground this spring; by 2009 tenant spaces will be available for interior office construction.

At one time the plan was for ACS to occupy a portion of the building and sell the rest as office condos; that concept has been shelved permanently, Lynch says. "ACS believes this will be a good long term investment for it and their plan is to lease the reminder of the building."

 

 
 




 
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