More Than 15 D.C.-Area Office, Apartment And Hotel Properties Sell In $1.2B Year-End Closing Rush
The final weeks of the year are often busy for investment sales brokers, as buyers and sellers push to close ongoing deals before popping their champagne on New Year's Eve, and last month was no exception in the D.C. region.
At least 15 commercial property sales totaling more than $1.2B closed between Dec. 8 and Dec. 30, according to a Bisnow review of public deed records, announcements and news reports.
The total combined price of the deals is likely much higher than that, as the parties involved in two major sales that were announced — a 1,334-unit apartment property and a 277-acre industrial development site — didn't disclose the sales price and they haven't yet been posted to public land records.
The flurry of deals closing at the end of the year is a common phenomenon in markets around the world, as buyers and brokers look to push transactions over the finish line to meet yearly goals, but experts have said the rush may lead firms to make bad investments. The phenomenon occurred in the D.C. area in December 2020, when at least 10 commercial property sales totaling $743M closed in the final two weeks of the year.
Last month's deal rush of more than $1.2B comprised a significant portion of the year's total sale volume. While year-end totals aren't available for all asset classes, the D.C.-area office market — typically the sector with the most expensive sales — recorded $4.8B of sales in 2021, according to Newmark's Q4 report.
Below is a rundown of the deals that closed over the last few weeks of 2021.
Dec. 30: Jair Lynch Real Estate Partners acquired the 1,334-unit Barcroft Apartments on Arlington's Columbia Pike corridor from the DeLashmutt family, which built it in 1939, the buyer announced. It declined to disclose the sale price. The property at 1130 South George Mason Drive is set to be preserved as affordable housing for 99 years through a $310M loan from Arlington County and Amazon, part of the tech giant's $2B Housing Equity Fund. Arlington County Board Member Christian Dorsey referred to the sale as a "half-billion-dollar deal" during a board meeting last month, the Washington Business Journal reported.
“I had the privilege of touring Columbia Pike eleven years ago," Jair Lynch Real Estate Partners CEO Jair Lynch said in a release. "Back then, it was clear Columbia Pike held a bright future, but to unlock it, we needed to invest properties of size and scale in order to accelerate the transformation of the corridor. When the opportunity to purchase Barcroft Apartments arose, we knew we had to act."
Dec. 29: Lincoln Property Co. and Cadillac Fairview acquired the vacant office building at 1125 15th St. NW from S.C. Herman for $82M, according to documents posted to the D.C. Recorder of Deeds. Stream Realty Managing Director Matt Pacinelli, who brokered the deal on behalf of the seller, confirmed to Bisnow that the buyers are planning to convert the building to apartments and are working with Hickok Cole as its architect.
The LPC-Cadillac partnership is also working with Hickok Cole on an ongoing office-to-residential conversion at 1313 L St. NW, and it filed a zoning application in October indicating it plans to convert this 15th Street property to 264 units.
Dec. 29: An affiliate of Ares Management acquired the property at 2461 Wisconsin Ave. NW for $11.4M, according to documents posted to the D.C. Recorder of Deeds. The two-story building, sitting one block from the U.S. Naval Observatory, is occupied by KinderCare Learning Centers.
Dec. 27: An affiliate of Mill Creek Residential acquired the site of the former Superfresh market at 4330 38th St. NW for $24.1M, according to documents posted to the D.C. Recorder of Deeds. The site has long been eyed as apartments, but the site's previous owner, Valor Development, had a 214-unit plan that has been stuck in the D.C. Court of Appeals since July 2020. The buyer declined to comment.
Dec. 22: An affiliate of Bernstein Management Corp. acquired a series of properties near the Petworth Metro station for $56.7M from an affiliate of TA Realty, according to deed records. The deal includes the 161-unit Park Place at Petworth apartment building, 14K SF of retail and a 192-space parking garage near the intersection of Ninth and Quincy streets NW, Bernstein CEO Josh Bernstein told Bisnow.
"We love the Petworth neighborhood for its dynamism, diversity and authenticity," Bernstein wrote in an email. "It has both a rich history and a promising future."
Dec. 20: A partnership of Atlanta-based senior housing developer Galerie Living and D.C.-based Community Three Development paid $40M to acquire the former site of the National 4-H Conference Center in Chevy Chase, Maryland. The development team said it is planning a senior housing project for the 12.2-acre property at 7100 Wisconsin Ave., but it is still early in the planning process and aims to unveil more details this quarter.
"We believe that our brand's dedication to creating unexpected happiness for seniors, families, and communities respects a proud 4-H legacy of head, heart, hands and health," Galerie Living CEO Tim Gary said in a release. "This site is ideal to bring our Corso community, blending comfort with beauty in a location that will enable our residents to remain near to their families, which is as important to healthy living as any medicine."
Dec. 17: The Meridian Group made its entrance into the industrial market with the purchase of a 277-acre development site in Winchester, Virginia, the firm announced. It didn't disclose the acquisition price, but a spokesperson said the full cost of the development will be $150M. It is partnering with Wickshire Industrial on the project, One Logistics Park, which is planned to have 2.8M SF of distribution logistics space and 100K SF of gas station, quick-service restaurant and retail space.
"Companies and their customers want their products delivered faster and more efficiently than ever before. This has created incredible demand for larger warehouses that keep supply chains running as smoothly as possible,” TMG Vice President of Acquisitions Kyle Maurer said in a release. “That’s why we’re diversifying our portfolio and starting with One Logistics Park, developing this property to offer world-class industrial space in an ideal location for logistics.”
Dec. 17: Washington Property Co. paid a combined $70.2M to acquire several properties, including a 227-unit Alexandria apartment building and three College Park apartment properties. The deals were the first multifamily acquisitions for the firm, which typically develops apartments.
Dec. 16: Terrano Realty Corp. paid a combined $72.7M for two D.C.-area industrial properties. The San Francisco-based firm bought a 4.4-acre property in Bladensburg and a three-building complex in Alexandria, the Washington Business Journal reported.
Dec. 16: Beacon Capital Partners paid $16.5M to acquire the office building at 1735 K St. NW from the Financial Industry Regulatory Authority, according to documents posted to the D.C. Recorder of Deeds. The 97K SF building serves as the headquarters for the Financial Industry Regulatory Authority, according to its website. The buyer declined to comment.
Dec. 15: An affiliate of The Carter Funds acquired a 326-unit apartment property in Germantown for $103M from PRP LLC, the seller announced. The Park at Kingsview Apartments, built in 2001, previously sold to PRP in 2016 for $70M.
Dec. 15: Avanath Capital Management acquired the 2M Street apartment building in NoMa from WC Smith for $103.5M, the seller confirmed to Bisnow. The 314-unit building, delivered in 2014, includes 93 affordable units and a large suite of amenities such as an indoor basketball court.
Dec. 14: Foulger-Pratt paid $56M to acquire the vacant office building at 1425 New York Ave. NW from a partnership of Monument Realty and Ares Management. The buyer told Bisnow it plans to convert the office building to 255 apartments and is working with WDG Architecture on the project. Cushman & Wakefield's Bill Collins and Shaun Weinberg brokered the sale.
Dec. 13: Dauntless Capital Partners acquired two D.C. hotels from Douglas Development for a combined $152M, the seller announced. The 200-room Moxy Washington D.C. Downtown hotel at 1011 K St. NW sold for $86M, and the 143-room Courtyard by Marriott at 1733 N St. NW sold for $66M. Newmark's Miles Spencer and Greg Morgan brokered the deal.
Dec. 9: Bridge Investment Group paid $106M for the Willows Oak Corporate Center in Fairfax. The three-building, 584K SF office park was sold by KBS, and Newmark's James Cassidy, Jud Ryan and Grant Marley brokered the sale.
Dec. 8: USAA Real Estate Co. acquired the Sentinel Square III office building in NoMa from MetLife Investment Management for $305M, the Washington Business Journal first reported. The 540K SF office building at 45 L St. NE, developed by Trammell Crow, is occupied by the Federal Communications Commission. Cushman & Wakefield brokered the sale.