DC Office Sold for $531M, Priciest Deal Since 2020
Tokyo-based Mori Trust buys former NPR HQ from Boston Properties.
The bar has been raised for the priciest office sale to date this year in DC with Mori Trust’s acquisition of 601 Massachusetts Avenue NW, the former NPR headquarters, for $531M.
In fact, Mori’s deal is the most lucrative in DC since 2020.
The Tokyo-based firm purchased the 479K SF building from Boston Properties, which developed the property in 2015 for $350M. The building is located in the Mount/Vernon Triangle/Chinatown neighborhood in proximity to the Capital One Arena and the city’s convention center.
The law firm Arnold & Porter LLP currently is leasing the entire building at 601 Massachusetts in a long-term deal that doesn’t expire until 2035, according to a report in the Washington Business Journal.
What was previously the largest full-stake office deal in DC took place in March 2020, when a joint venture of Hana Financial and Nuveen Real Estate bought a 533K SF building at 601 D Street NW for $399 from Tishman Speyer. JLL represented the seller.
The largest overall deal, including partial stakes, since 2020 had been the purchase by a consortium of South Korean investors for $480M a 49% interest in Midtown Center, an 869K SF building at 1100 15th Street NW.
Mori’s deal also surpasses the previous high for the most lucrative DC office trade this year, Nuveen Real Estate’s $375M acquisition of the Patrick Henry building. Tishman Speyer sold that property, located at 601D Street NW.
The purchase is the second major DC metro area deal for Mori Trust, which entered the DC market earlier this year.
In March, Mori Trust acquired Arboretum II North and South, a two-building office campus at 2235 and 2245 Monroe Street encompassing 324K SF in Herndon, VA for $142M from Barings. The campus, in proximity to Dulles Airport, was 100% leased.
Mori’s US acquisitions are part of $1.4B “Advance 2027” strategy of investing in overseas real estate assets.
The sale price for 601 Massachusetts surpassed the $500M target set earlier this month by the German multinational insurance giant Munich Re Group when it listed a trophy office near the White House and indicated it was aiming for the priciest deal of the year in DC.
MEAG, the asset-management arm of Munich Re Group listed for sale Columbia Square, a venerable 600K trophy office building a short walk from the White House at 555 13th Street NW.
MEAG has given the listing to Cushman & Wakefield. The building has been valued at close to $500M, which at $833 per SF would result in a buyer’s annual yield of 5.5%, according to a Green Street report.
The 13-story building stretches a full block between 12th and 13th Streets adjacent to Warner Theater. The property is two blocks east of the White House and a block from the Metro Center station.
Older office buildings in Washington’s central business district emptied out during the pandemic, but DC has been the third-most active market for office sales so far this year, with $3.6B of offices valued at $25M or more trading in the DC metro during H1 2022, according to Green Street data.