The 10 Biggest DC Office Sales (So Far) in 2015
DC is a gateway city, meaning, along with New York, San Francisco and Boston, it’s among the top places foreign investors—and others—like to place their capital. And that's resulted in some record-breaking deals so far this year. Here are the 10 biggest, according to Colliers International.
1. Brookfield's 10-Office Portfolio
Address: 77 K St NE, 750 9th St NW, 799 9th St NW, 1200 K St NW (above), 1400 K St NW, 650 Massachusetts Ave NW, 1250 Connecticut Ave NW, three Bethesda properties
Brookfield sold a 49% stake in these 10 properties, retaining control in all buildings but injecting the operations division with some cash. Brookfield EVP Greg Meyer, who leads the DC region, tells us, “We are strong believers in the DC market. The venture with Aussie Super allowed Brookfield to recommit to a great group of core DC assets for the long-term, generate proceeds for more opportunistic investments, and deepen a valuable relationship with a great partner. It was a win-win-win outcome.”
2. America's Square
Address: 300 New Jersey Ave, 51 Louisiana Ave NW
Seller: Ralph Dweck
Ladies and gentlemen, your new DC record-holder for an office sale. German investment fund Jamestown paid $1,101/SF with a cap rate of 4.3% for these two buildings a stone’s throw from the US Capitol. It beat out PNC Place when it traded in February and hasn’t been matched since. Dweck has gone on a selling spree of late, but this was the jewel of the bunch.
3. 1801 K St NW
Seller: Somerset Partners
Buyer: Mirae Asset
The South Korean fund bought this property shortly after 2015 began for $781/SF. The deal was brokered by JLL, which had the unique privilege of brokering the sale of its HQ (the firm leases 85k SF in the building, although the lease runs out in 2017). Renovated in 2009, the building won’t be sweating JLL’s departure; it signed the Federal Reserve to 200k SF two years ago.
4. Republic Square
Address: 25 Massachusetts Ave NW
Seller: Republic Property Trust
Buyer: TIAA-CREF/Norges Bank
The JV of the American union and Norwegian investment fund made another huge purchase, the year after buying PNC Place and breaking the $1k/SF mark in office sales. This is the only building in the top five less than 95% occupied, but a certain tenant makes it far more appealing: Google occupies 62k SF, and is locked into a lease until 2025.
5. 1101 K St NW
Seller: The Rockefeller Group/Mitsubishi Estate New York
The 311k SF building is the most expensive trade in the East End this year, which could be a result of landlords holding onto assets as rents climb in DC’s most sought-after office leasing submarket. 1101 K St was built in 2006 by JBG and sold to Rockefeller in 2010 for about $686/SF. The JV was able to make almost a $100/SF profit, selling to UBS at $780/SF.
6. 1615 L St NW
Seller: Spitzer Enterprises
Buyer: Carr Properties/Alony Hetz
This sale just closed last month, closing the books on four years of ownership by former New York Gov. Eliot Spitzer. Spitzer bought the 31-year-old building, renovated in 2004, for $180M. As the Wall Street Journal points out, the 13-story, 417k SF property is one block from the Mayflower Hotel, the site of the infamous meeting with a call girl that ultimately ended his governorship.
7. 1325 & 1341 G St NW
Seller: TIER REIT
Buyer: Westbrook Partners
The oldest un-renovated property in the top 10, these two buildings are 51 years old. But, unlike most buildings constructed during the Lyndon B. Johnson Administration, these two are having no trouble signing tenants, with recent leases signings for high $40s/SF, according to Colliers.
8. Franklin Tower
Address: 1401 Eye St NW
Seller: Shorenstein Realty Partners
This prominent property fetched the second highest per SF price in the top 10, after America’s Square, at $813. Despite the property’s last renovation coming in 1992, it’s got enough brand recognition, and anchor tenant Polinelli Shughart taking up 40k SF, to fetch such a pretty penny.
9. Rosslyn Metro Center
Address: 1700 N Moore St
Seller: Clover Development
Buyer: American Real Estate Partners/Stanley Zupnik
Next door to 1812 N Moore and across the street from Central Place, this aged office/retail building is a prime repositioning or redevelopment candidate. Considering Rosslyn has no height act—1812 and Central Place are among the tallest buildings in the region—this could be a significant value-add buy.
10. Gallery Place
Address: 616 H St NW
Buyer: Oxford Properties Group
Price: $166.6M for 49% stake
A true mixed-use property, Gallery Place’s bustling 280k SF of retail that’s priced “significantly under market,” Colliers notes. The 200k SF of office is leased to the GSA and DC government. Just another feather in the cap for Oxford in the East End, which has JVs with Gould Property on two Class-A buildings in Mt. Vernon Triangle.