Tech CEO Drops $100M On 2 D.C.-Area Office Properties
A technology executive with a long history of commercial real estate investments has executed a pair of office acquisitions worth more than $100M combined, Bisnow has learned.
Schaeffer acquired the Downtown D.C. office property for $63M on July 8, D.C. property records show. The 207K SF building is 80% leased by the General Services Administration for the next seven years, according to a source involved in the deal.
The seller, Eleven Eighteen Limited Partnership, was a partner in the building's development in the 1980s, according to a 1987 Washington Post article. Since then, the office space has reportedly been occupied by the Equal Employment Opportunity Commission and the Office of the Special Inspector General for the Troubled Asset Relief Program. The limited partnership consists of more than a dozen individual investors, according to the source.
The Tysons property, a two-tower, 386K SF office asset, was formerly owned by Lerner Enterprises and sold for approximately $50M, according to a second source involved with that deal. Lerner developed, owned and managed the property and recently renovated it, according to its website.
That property is roughly 40% leased, according to the source. Tenants include the GSA, PAE and M&T Bank, according to Lerner's website. Lerner Enterprises didn't respond to a request for comment.
Schaeffer's plans for the buildings remain unclear. Cogent Communications declined to comment on either deal.
The CEO's history as a commercial real estate investor in the region spans decades. His investing began in 1977, and by 2001 he owned over two dozen properties, according to a Washington Post story from the time.
Schaeffer founded Cogent Communications in 1999, and today it's one of the largest internet providers in the world, providing high-speed internet to over 217 major markets worldwide, according to its website. The D.C.-based company has more than 30 offices across North America, plus several others in Europe and Asia.
Schaeffer, whose affiliate LLCs are often named after elements like Thallium, Gallium and Flourine, owns more than 1.7M SF of real estate in the region, the Washington Business Journal reported in 2019. Other recent deals include a stalled office project in Tysons and a pair of renovated office buildings in Rosslyn.
Schaeffer ranked No. 32 on WBJ's list of highest-paid company executives in greater Washington, earning $11.5M last year.
Jon Banister contributed reporting for this article.