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A small, Los Angeles-based investor has entered the DC market with a four-building Lanham office deal and has plans for more.
Melrose Holdings acquired Maryland Corporate Center, a four-building, 224K SF portfolio, from Colony Realty Partners for $7.3M. The properties, 7404 Executive Place, 7375 Executive Place, 7401 Forbes Blvd. and 7501 Forbes Blvd., sit just off Route 193 in Lanham.
The portfolio is 43% occupied and had been foreclosed on before the acquisition. Melrose has retained Lee & Associates to manage and lease the asset.
“These buildings are multi-functional as well as ideally suited for medical and healthcare end-users and government contractors,” Lee & Associates' Bill Harrison said in a release. “With large blocks of space immediately available, there exists opportunity for companies to establish a large operation in the Lanham submarket, as well as to expand an existing presence."
This is the first East Coast acquisition for the firm, which owns five Los Angeles properties. Melrose asset manager Steve Manela said the investor chose to expand to the DC area because it has higher cap rates than LA, meaning investors can get greater return on a property.
Melrose is planning to invest about $3M in capital improvements to help lease the property up. Once the asset is stabilized, Manela said he hopes to acquire more properties in the Prince George's County submarket.
"There is going to be continual demand for Maryland," Manela said. "Also, right now, this is an economy in that area that is OK, but it’s not the way it once was. But we believe it’s going to return. We feel the economy is going to be going up."
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