The eight-story, 112,000-sf medical office building, which was built in 1986, is now 96% leased to 49 tenants. Perseus Realty Capital represented the sellers.

Tom Howland, managing director of Perseus, tells GlobeSt.com that the building was mismanaged and undervalued when it was acquired with occupancy at 82%--an aberration in the tightly occupied West End. The building, located a short distance from the area's major hospitals, including George Washington Hospital, Georgetown University Hospital and Sibley Hospital, is ideal for a medical office building. "The buyers saw this as an opportunity to lease up what could be a very attractive building after minimal upgrades," Howland says.

The sellers invested $2.5 million to $3 million in capital upgrades that included improvements to the exterior entrance, main lobby, interior corridors, restrooms, elevator cabs and HVAC controls. Rents rose from the mid $30s to low $40s, Howland says.

WRIT says that it expects to achieve a first-year, unleveraged yield of 6% on a cash basis and 6.5% on a GAAP basis. The acquisition was funded with cash from operations and WRIT's line of credit.

WRIT has been steadily building a significant portfolio of medical office buildings in the DC area. Last year, for example, it took over ownership of the four-building Shady Grove/Plumtree Medical portfolio for $67 million, as reported by GlobeSt.com.