PRACTICALLY AN INSTITUTION

Cassidy Turley's Jon Carpenter (with MCB Real Estate co-founder David Bramble at a Bisnow event last year) tells us Goldman Sachs affiliate Archon's purchase of a 216k SF Columbia office portfolio is a contrarian play for the buyer. That's because it's suburban, but Archon has a DC office that gets the unique demand drivers (we're talking about federal cybersecurity  spending) in the DC-Baltimore tweener 'burbs. Jon and colleague Jay Wellschlager repped the seller, Goldstar Group, closing out its fund with this last asset. Jon also says Archon is developing a BWI-area property, partially leased to Ciena, which will complement its '08-vintage Station Ridge there.
Archon's four new buildings, known as Lakeview I and II, sold for $30.2M, or $139k/SF, low on the price-per-SF spectrum of recent Columbia deals. But Lakeview is older (built in the '80s) and needs capital—something Archon has and is willing to part with—for both improvements and TIs as lease-up gets under way, not to mention several leases rolling within three years. Other recent Columbia deals, all facilitated by Cassidy Turley (note the higher prices):
  • New Boston Fund bought the 84k SF Stevens Forest Green for $164/SF, but it was built within 10 years and has no rollover for five years within its 86% occupancy.

  • First Potomac bought the 86k SF Hillside I and II (also a newer complex, and it's fully leased) for $188/SF.

  • Prologis sold 14 fully leased Columbia Business Center (161k SF) and Columbia Gateway (202k SF) assets to Greenfield Partners for $156/SF and $152/SF, respectively.

  • Wells Real Estate Funds bought the 201k SF Franklin Center for $325/SF.

The big point, Jon says, is that list of Columbia buyers—all strong institutions.

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