WashREIT Under Contract To Buy Watergate 600 For $135M
WashREIT is under contract to buy the Watergate office building at 600 New Hampshire Ave. for $135M.
The seller, Atlantic Media owners Katherine and David Bradley, have owned the property for 12 years. Atlantic is also the anchor tenant in the building, occupying 140K SF. The acquisition, which works out to $437/SF, is expected to close in April. Cushman & Wakefield's Paul Collins, Bill Collins, Drew Flood, Shaun Weinberg and Brad Geiger represented the seller.
The sale is partially structured as an OP unit transaction, meaning the sellers will obtain shares in WashREIT as part of the deal. WashREIT is planning to use a similar structure to acquire additional properties, CEO Paul McDermott said in a release.
The 12-story, 309K SF office building, one of the six buildings in the famed Watergate Complex, was built in 1972 and underwent renovations in 1997. It is 97% leased, though there will be major vacancy come 2018 once law firm Blank Rome moves out of its 90K SF office.
WashREIT sold its suburban Maryland office portfolio for $240M last year in an effort to focus its attention on core transit-accessible properties. Once the deal goes through, the REIT is planning a major facelift that will include adding a fitness facility and a conference center, upgrading the rooftop and lobby, and expanding the ground-floor restaurant space.
“The acquisition of Watergate 600 exemplifies Washington REIT’s office strategy of acquiring high-quality, urban, metro-centric assets and further increases our footprint within prime locations in the District,” McDermott said. “Following the company’s value-add success at 1775 Eye St., which was acquired and renovated in 2014, 600 New Hampshire provides Washington REIT with another excellent opportunity to create value for our shareholders through effective repositioning and leasing.”
Another office building within the Watergate complex, 2600 Virginia Ave. NW, was sold to Rockwood Capital in November for $80M. The Watergate Hotel recently underwent a $125M renovation, thanks to Euro Capital Properties.