Savills Opens DC Office with $300M Pipeline

WASHINGTON, DC-Savills is expanding its footprint to Washington, DC with a new office at 1101 Pennsylvania Ave., NW and a pipeline of $300 million in deals, Joel Coren, who is heading the team here, tells me. Savills is primarily a representative for the buy side with a focus on overseas investors and Washington is a key market for this constituency. Savills is also opening a new West Coast office in Los Angeles, as part of its push to expand its Americas network beyond New York City and Mexico. Robert Stamm is heading the West Coast office in Los Angeles, where he is joined by director Brandon McMenomy.

The group did $1 billion of advisory transactions last year on behalf of offshore clients, Coren says. “We launched in 2007 advising offshore clients in the US pre-recession markets--a time when a lot of overseas groups found themselves priced out. Now, post-recession they are finding increasing value here again.” One such deal was 1999 K St., NW, which sold to Germany-based Deka Immobilian GmbH at $830 per square foot, or $208 million.

The $300-million of potential deal flow is solely within the core, trophy sector, Coren says--a space that is experiencing a moment of froth. That will continue for the next few months, but when the markets, in general, start to further improve there will be more diversity, he predicts. “Buyers that are only focused on core trophy deals will start to expand their comfort zones into value add deals. Also, as we move into an environment where interest rates creep up that will also have an impact on values.”

In the long term, though, Coren sees prices heading even higher in the District, and international buyers will continue to invest here. “Overseas buyers like the DC market because its lot sizes, or its deal volume, is manageable,” he says. “Some New York City buildings can go for $500 million-plus. DC offers investors properties in good-sized bites. They can put one in a fund and it doesn’t make it too weighted to a specific market.”