2001 Pennsylvania Ave, NW

WASHINGTON, DC—The area may have its theories about forthcoming trends in leasing supply and demand, but there is clearly no dearth of investors interested in fully-occupied buildings.

Word on the street has it that the James Monroe Building at 2001 Pennsylvania Ave., NW has a buyer. A call to Property Group Partners, which put the building on the market last October, was not returned by presstime.

There is no news, confirmed or otherwise, on the price or buyer for the eleven-story, 150,783-square foot building, which was acquired by a JV between the then Louis Dreyfus Property and Benenson Capital, other than the observation that it last traded in 2007 for $111.5 million in cash (later, the new owners received $78.8 million in permanent financing from ING Real Estate Finance).

Also of note about the potential transaction, though, is this: the CBD building is fully occupied.

Lately, it seems, full-occupancy, or close to it, is what investors prefer for this market. This anecdotal observation is hardly true across the board. Just to name two recent examples: Metro Center I, which is expected to trade for $215 million, is 88% occupied and Sentinel Square I, which was bought out by partial owner Cottonwood Partners, is 86% occupied.

That said, the proportion of completely-occupied buildings snapped up by investors in recent weeks is a healthy one.

Consider:

  • The Westbridge at 2550 M St NW, traded for $156 million, or $753 per square feet and a 5.4% cap rate, is fully occupied by one tenant, Patton Boggs. The new owner is Mirae Asset Global Investments.
  • Randolph Square at 2800 S Randolph St., in Arlington, VA, which sold for $56.3 million or $297 per square foot to Easterly Partners was fully occupied.
  • 1110 Vermont Ave NW, a $162.5 million trade, came close at 96% occupancy. Epic UK was the buyer in that deal.