The locally-based REIT is trying to exit the retail industry as the sector is taking a beating. Indeed Washington REIT, as part of its guidance in its Q2 earnings, lowered its same-store NOI growth expectations, primarily due to delayed lease-up assumptions–retailers are taking a greater-than-expected amount of time to sign leases, the executives said during the earnings call.

Why Sell Now?

During that same call a possible motivation for the sale was hinted at: Washington REIT wants to expand its value add multifamily holdings and the REIT is actively looking at two assets. Later in the call, executives were asked about a disposition strategy and CEO Paul McDermott responded that nothing was on the market right now. “But what would trigger that would be a potential multifamily value-add acquisition if we were lucky enough to get the award,” he said.

About the Portfolio

McDermott also reported that the REIT retained 100% of its expiring retail square footage and renewed close to a 0.25 million square feet of retail leases in the first half of this year. “Nearly all of our retail renewals this quarter have been driven by the tenants exercising early renewal options, a trend that exemplifies the resiliency of retail in the DC Metro region and our proactive approach to tenant retention,” he said.