The Age of the Megadeal: Tale of the D.C. Office Market
- Aug 07, 2015
By now, the Washington, D.C., office market’s attraction for investors is nothing new. But all the competition is not deterring interested buyers, who continue to rush to acquire properties in the region, resulting in new, record-breaking deals seemingly popping up every day.
While the latest deal may not set any new records, it’s pretty big. Boston Properties announced in its latest earnings report that it has already found a buyer for the trophy office building at 500 Eighth St., N.W., in the District’s Penn Quarter neighborhood. The Boston-based REIT placed the property on the market in May, when it retained DTZ to market it.
According to Boston Properties, the 325,000-square-foot Class A office building will be sold for $318 million, including the assumption by the as-yet-unnamed buyer of approximately $117 million of mortgage debt. The deal is expected to close by the end of the third quarter.
The 10-story 500 Eighth St. was constructed in 2007 on a 0.81-acre site midway between the White House and the U.S. Capitol Building. DTZ said in May that the property was 98 percent occupied, with the renowned law firm DLA Piper occupying 73 percent of the total space.
The deal to sell 500 Eighth St. wasn’t the only one to surface in the past few days. Holliday Fenoglio Fowler L.P. revealed that it has arranged a $66.3 million joint venture between affiliates of Meritage Properties and an institutional equity investor for the acquisition of a three-story office building in Bethesda. The property is located at 6555 Rock Spring Park Drive and is known as the Atrium at Rock Spring Park. It offers 237,000 square feet of space and, according to HFF, it is currently 86 percent occupied by seven tenants, including The National Institutes of Health and SAIC.
Other details about the deal were not disclosed. Managing director Dek Potts led the HFF investment sales team responsible for arranging the equity joint venture. The team also included Executive Managing Director Stephen Conley, Senior Managing Directors Jim Meisel and Andrew Weir, and Associate Director Matthew Nicholson.
Photo courtesy of DTZ.