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One of Philadelphia's most high-profile developers has entered the Washington, D.C., commercial real estate market for the first time.
Post Brothers has acquired a duo of neighboring office buildings at 1825 and 1875 Connecticut Ave. NW, known as Universal North and Universal South, the Philadelphia Business Journal reports. Post paid seller JBG Smith $101.5M for the 460K SF Universal North and $102.2M for the 302K SF Universal South for a total purchase price north of $200M.
The two buildings were originally developed in the 1950s and 1960s, and they were most recently renovated in the 1990s, according to Newmark, which marketed the properties for sale, PBJ reports. From 2014 to 2021, WeWork occupied one-third of the office space in Universal North, which sits across T Street NW from the historic Washington Hilton hotel. WeWork departed the building in early 2021 as part of its wave of closures during the pandemic.
Post Bros.' portfolio contains a number of large-scale multifamily projects in Philadelphia, with one in North Bergen, New Jersey, often with ground-floor retail. In the past three years, the scale of its projects increased further when it took over the development of two massive projects started by Bart Blatstein in Philly. Based on the company's history, the advanced age of the Universal buildings and the oversupply plaguing D.C.'s office market, an office-to-multifamily conversion is likely.
JBG Smith, one of the largest office landlords in the Washington, D.C., area, is in the middle of a pivot to focus on multifamily in its portfolio, with the notable exception of National Landing, the development district in Alexandria where it holds the lion's share of office buildings and where Amazon is putting together its HQ2.
The transaction was financed with a $129.7M loan from an affiliate of Mack Real Estate Credit Strategies, a subsidiary of Mack Real Estate Group focused on alternative lending, PBJ reports.
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