JBG Smith Sells New L'Enfant Plaza Office Building For $167M
A Southwest D.C. office building that delivered two years ago has traded hands in one of the largest D.C. office sales this year.
JBG Smith and Landmark Partners sold the building at 500 L'Enfant Plaza SW for $167M, the REIT announced Tuesday. It didn't disclose the buyer, and the sale hasn't yet appeared in public deed records.
JLL's Jim Meisel and Matt Nicholson represented the sellers in the deal. JBG Smith owned 49% of the building, and the other 51% was owned by Landmark, which is now a subsidiary of Ares Management Corp. after being acquired in June.
The 215K SF office building completed construction in 2019. The development team signed anchor tenant Urban Institute to a 121K SF lease in early 2017 before breaking ground.
The building is now 96% leased, according to JBG Smith, and its other tenants include Cobec Consulting, Noblis and WMATA's Office of the Inspector General. The project was designed by ZGF Architects, the same firm that is working with JBG Smith on the first phase of the Amazon HQ2 development.
The building sits within two blocks of the L'Enfant Plaza Metro station and the International Spy Museum, which opened in 2019. It is also roughly a half-mile from southwest waterfront megaproject The Wharf.
JBG Smith for the past three years has been pursuing a strategy of shifting its portfolio from office assets to multifamily and mixed-use properties, and it has been concentrating its portfolio in neighborhoods like National Landing and Capitol Riverfront.
“We continue to make progress on our capital recycling goals as we shift to majority multifamily through a combination of investing in multifamily assets and divesting of non-core office assets, primarily outside of National Landing,” JBG Smith Chief Investment Officer George Xanders said in a release.
D.C.'s investment sales market has struggled with low transaction volume throughout the coronavirus pandemic, with sales down 68% for the 12 months ending June 30, according to Newmark's Q2 report. Only two office sales in the District closed for higher price tags than the 500 L'Enfant Plaza deal through the first half of this year, a $202M NoMa sale and the $215M Hines Global Income Trust paid in a Capitol Riverfront deal.