WASHINGTON, DC-A CBD property, the Farragut Building, has traded hands. ING Clarion sold the property, located at 17th and Eye streets along Farragut Square, for $93.5 million, or $638 per square foot.
Generali Group, advised by Falcon Real Estate Co., bought the building. ING was represented by Cassidy Turley’s Bill Collins, Paul Collins, Drew Flood, James Cassidy and Jud Ryan. Despite its central location, the building had seen occupancy rates as low as 50%. Essentially, it was a B building in a trophy location, Cassidy tells GlobeSt.com. ING began an extensive renovation of the property in 2005 repositioning it to class A status. Since the rehab delivered in 2007, the occupancy rate has risen to 97%. Most of the leasing was during pretty tough times,” Cassidy notes.
This CBD trade follows on the heels of another: 1899 Pennsylvania Ave. traded at $812 per square foot. Cassidy says the cap rate for the Farragut Building was lower than 1899 Pennsylvania’s by a couple of points. “The square foot price was lower because the in-place rents were lower,” he tells GlobeSt.com. “In fact, that was one of the things that was attractive about this sale to the buyer: its price per square foot is below replacement cost.”
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
