WASHINGTON, DC-Manhattan-based Rockrose Development has swooped in and acquired an office in the city’s Golden Triangle at the distress price of $43 million. The building, located at 1150 18th St., was purchased out of special servicing from LNR Property, who took over the 180,000-square-foot property about a year ago from Joss Realty. It traded at a 25% discount from the last time it was sold, which was in 2007.
The property went into distress because it traded at the height of the market and then the new owner embarked on expensive renovations, VP Justin Elghanayan tells me. Rockrose also plans to invest in some upgrades, about $4 million worth, which will be spent on rehabbing the lobby and bathrooms. It has retained locally-based Fox Architects to make the design changes.
Rockrose has been focusing on the building’s 20% vacancy rate, and has brought it up by nine percentage points over the course of the negotiations. The ground floor space was recently leased to the Embassy of Japan’s cultural center. “There is a 5.3 cap rate going in and we expect it to reach 8.75 upon stabilization,” Elghanayan says.
Built in 1990, the 10-story office building was designed by Don Hisaka and features a central sky-lit atrium that provides natural light on 85% of the building’s perimeter. The building’s tenants include the corporate headquarters of Lexis/Nexis, Business Software Alliance and several law firms.
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