WashREIT to Sell Office Portfolio for $766M
Aligning with its multi-year transformation into a multifamily REIT, the company has also agreed to sell its remaining retail assets.
WASHINGTON DC – WashREIT has entered into a definitive agreement to sell the majority of its office portfolio to a Brookfield Asset Management private real estate fund for $766 million.
The sale represents part of WashREIT’s multi-year strategic transformation into a multifamily REIT. WashREIT has additionally signed a letter of intent to sell its remaining eight retail assets.
The 12-property office portfolio totals 2.4 million square feet in the Washington DC metropolitan area. The portfolio is 83% occupied.
The office portfolio sale is expected to close in Q3 2021, subject to the satisfaction of customary closing conditions. WashREIT’s future retail portfolio sale is also expected to be complete in Q3 2021.
WashREIT plans to utilize the net proceeds of the office portfolio sale and future retail sales to fund the expansion of its multifamily portfolio through acquisitions in the Southeast. The REIT also plans to reduce its leverage by repaying outstanding debt.
Once the office portfolio sale is complete, WashREIT will own one remaining office asset, which it plans to dispose of. The remaining asset comprises the class A, 295,000-square-foot office building, Watergate 600, located in Washington DC.
WashREIT’s multifamily strategy encompasses targeting class A, class B value-add and class B assets, while focusing on the mid-market renter. The REIT plans to expand its geographical focus into the Southeastern markets of Atlanta, Raleigh-Durham and Charlotte.
“We are announcing the most significant milestone to date in our transformation into a multifamily REIT,” states WashREIT president and CEO, Paul McDermott. “This transaction, along with sourcing multifamily expansion opportunities and our retail sales process, signals our belief that the multifamily asset class is the best vehicle to harness long-term growth for our investors.”
McDermott adds, “Completing this sale will allow us to strengthen our balance sheet by eliminating near-term debt maturities until 2023.”
JLL served as WashREIT’s exclusive real estate advisor in the office and retail portfolio sales. Goldman Sachs & Co. LLC serves as the exclusive strategic financial advisor to the company.