In this market a successful investment sale is reason for celebration. But even for people eager to see some--or any--activity, a $75-million trade for eight offices is still low enough for DC to give pause. To be sure, there are some mitigating considerations: some of the assets are industry/flex. Also, none of the portfolio is located in the District. Rather, most of it is in Prince George's County as well as Hampton, VA and Baltimore.
But the price point is also a reflection of a new reality in DC--indeed all--markets. After several months of stubbornly clinging to '07 trade comps, sellers are beginning to come down in their expectations.
It was also very helpful that Asset Capital Corp. was able to offer the buyer assumable financing, Kevill tells GlobeSt.com. "With the debt already taken care of, and the fact that the portfolio is largely leased, the buyer was able to better determine what [was]the yield on equity," he says. "In this market those are the types of deals that are most likely to close--deals where an investor can truly handicap the risk throughout the capital stack."
Creaney & Smith will be able to leverage significant economies of scale, Molloy says in a prepared statement. Each building holds a strong position within its submarket, and the portfolio offers higher blended yields, lower average price per square foot and flexible asset strategies, he says.
The portfolio consists of Commerce Center, Metro 400, 4260 Forbes and 4550 Forbes and 7700 Montpelier, all in Prince George's County in suburban Maryland. Executive Tower and Pinewood Plaza are in Hampton, VA, and 20 South Charles St. is in Baltimore. The six multi-story and two single-story portfolio is 91% leased to a diverse tenant base.
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