Mack-Cali Sells Final DC-Area Office Building, Prepares To Sell 15-Acre Greenbelt Site
A 122k SF Class-A office building in Prince George's County and an adjacent development parcel have just traded hands for $6.25M.
Chesapeake Real Estate Group, along with the principals from Thompson Creek Window Co, bought the property, located at 4200 Parliament Place in Lanham, from Mack-Cali. Cushman & Wakefield represented the seller, which sold an 806k SF Greenbelt office park last month for $49M to Morning Calm Management.
The Lanham parcel had originally been part of that Greenbelt deal until CREG and Thompson Creek asked Mack-Cali to spin it off and do a separate deal, which all parties agreed to, Cushman & Wakefield executive director Eric Berkman told Bisnow today.
While Mack-Cali has now disposed of its final DC-area office building, it still owns a vacant 15- to 20-acre site near the Greenbelt Metro. Berkman, who reps Mack-Cali, said the firm is under contract to sell that site, but it likely won’t close until after the FBI HQ decision, which would drastically change the value of the land.
“This sale is part of a strategic plan we committed to in 2015 that shifts our focus to assets in transit oriented mixed use areas in key markets,” Mack-Cali spokesperson Ilene Jablonski said. “Exiting non-core markets and disposing of some assets are providing the capital to help us expand elsewhere.”
Thompson Creek plans to move its HQ to fill 22k SF in 4200 Parliament, about a mile from its previous Lanham HQ. The move will bring the building's occupancy from 33% to 48%. The window, door and siding company also recently moved its manufacturing and warehouse operations into a new 117k SF Upper Marlboro building. The JV of Chesapeake and Thompson Creek had owned that building and an adjacent 167k SF warehouse before selling them last year for $33M.
In addition to the building, the sale included a development parcel where the JV plans to build another 120k SF office building, with the possibility of ground-floor retail.
With the office building alone, this sale went for $51/SF. Berkman says the seller was happy with the deal, which he described as a simple, one-off transaction. Chesapeake principal and managing partner James Lighthizer said the price was in line with similar deals in the county, adding that some factors may have led to the price being where it was.
“When you have a lot of vacancy, it is a tough road to hoe because you’ve got a lot of tenant improvements, capital improvements and it’s tough to get financing,” Lighthizer said. “When you add all those up, the values get depressed.”
Lighthizer plans to renovate and lease up the existing asset this year while he works on the design and permitting for the next building. He says he wants to get the development site ready for groundbreaking, but likely won’t start construction until he signs a lead tenant. He anticipates growing office demand in Prince George’s County and thinks this location has a lot of upside.
“When we clear the trees and do the grading, it sits on Route 50 so we think the visibility will generate some interest,” Lighthizer said. “If the [existing] building is full, maybe we’ll build spec, but we’re taking it one step at a time.”