JBG SMITH Sells Two D.C.-Area Assets for $344M
As a part of its capital recycling plan, the firm has sold a 12-acre National Landing development site to Amazon and a D.C. trophy office asset to Commerz Real.
ARLINGTON, VA – Owner, operator and developer JBG SMITH has sold two assets in the Washington D.C. area for a combined total of $344 million.
The firm has sold its 12-acre PenPlace development site to Amazon for $198 million. The e-commerce retailer will utilize the site for the second phase of its HQ2. Arlington County recently granted approval for the site to house 3.2 million square feet of office space, more than 100,000 square feet of retail space and 2.75 acres of public open space.
The PenPlace sale was used to facilitate a like-kind exchange for JBG SMITH’s purchase of The Batley, a 432-unit apartment building in Washington D.C., which closed in 2021.
JBG SMITH additionally closed the sale of an 11-story trophy office asset, located at 1900 N St. in Washington D.C.’s central business district. The firm sold the mixed-use office building to German company Commerz Real, through its open-ended real estate fund Hausinvest. 1900 N St. consists of 261,000 square feet of office space and nearly 9,000 square feet of street-level retail space.
Delivered in 2019, the office building was a joint-venture between JBG SMITH and Canada Pension Plan Investment Board. JBG SMITH will continue to serve as property manager and leasing agent.
“These sales further advance our capital recycling strategy,” says Matt Kelly, CEO of JBG SMITH. “Amazon’s purchase of PenPlace represents another milestone for JBG SMITH and further proves that we are full steam ahead in National Landing.”
Kelly adds, “As we saw with the sale of Metropolitan Park to Amazon in 2020, finalizing this deal allows us to move forward with our partners, realize Amazon’s vision and complete its second home here in the region. Metropolitan Park and PenPlace will bring exciting new amenities to the broader neighborhood including public parks, dynamic retail, and infrastructure improvements.”
Amazon, JBG SMITH and its construction and development partners recently topped out at Metropolitan Park. The two HQ2 buildings are still on schedule to deliver in 2023.
“Our accelerated capital recycling plan will shift JBG SMITH’s portfolio to majority multifamily, with an office portfolio concentrated in National Landing,” states George Xanders, JBG SMITH’s chief investment officer. “We set a target to market $1 billion of non-core office and land assets in 2022 and are well on our way to exceeding this goal with $990 million closed year-to-date. These proceeds provide us the flexibility to invest in opportunities with the highest potential risk-adjusted returns, including share repurchases under our recently increased share repurchase plan when our stock is trading at a material discount to NAV.”