801 9th Street, NW Trades for a Rumored $630 PSF

WASHINGTON, DC-801 9th, NW, in Downtown DC has traded for an undisclosed price. J Street Cos. represented the buyer in this deal—the Japanese investor N.S.P. Ventures Corp., in the purchase. Certainly the building is an international buyer’s dream: it is fully occupied by the US Mint with seven years remaining on the lease, J Street’s CEO Bruce Baschuk tells GlobeSt.com. Indeed, the building, which delivered in 1999, had been designed for that particular government operation. 

Baschuk declined to discuss pricing. Word on the street, however, puts the trade of the 236,054 square foot, 8-story, trophy quality at $630 per square foot.

Six years ago the buyer had looked at this building and passed for various reasons, according to Baschuk. It was a good thing, for them, that they did—today they were able to acquire the building for 25% less than they would have six years ago, he said. “That, of course, is due to the appreciation of the yen. It has gone up between 33% to 34% during that period.”

J Street will also provide property management and leasing services for the new owner, although Baschuk says the company has every intention of seeing the U.S. Mint remain a tenant beyond its seven-years.

A $630 per square price point would not be out of bounds for this building, given the
creditworthiness of the tenant and remaining lease term.

“Investors are generally becoming a bit more cautious about the DC market given the current political uncertainty, but continue to aggressively pursue long-term leased assets with creditworthy tenants,” Scott Homa, research director with Jones Lang LaSalle, tells GlobeSt.com.

Leasing fundamentals have not shown any real improvement over the past few months, Homa notes, “but there remains a strong appetite among investors for core assets with long-term leases in place.” Such assets, he says, are to command high prices and exceptionally low cap rates.

801 9th St., has been submitted for LEED EB-Gold certification. Architectural details include 8th floor terraces, floor heights that range between 12’ to 20’ and Level III security.  It is also next to the 1.9 million square foot mixed-use CityCenterDC development. HFF represented the seller in the deal.