WRIT Sells MOB Portfolio for $500M

WASHINGTON, DC-Washington Real Estate Investment Trust announced on Monday afternoon it has inked an agreement to sell its 1.5-million square foot medical office building portfolio for $500.75 million. The Washington Business Journal quickly unearthed the buyer -- Harrison Street Capital in Chicago.

The deal, which only includes two separate office assets, both of which have a significant medical office tenancy, is rolling out in four separate transactions. The purchase price translates into $329 per square foot for the 17 assets and two suburban office buildings, which are located 6565 Arlington Blvd. and a land parcel in Alexandria, VA. The projected closing date for the first two transactions is Nov. 12, 2013 and the outside closing date for the second two transactions is Jan. 31, 2014.

The medical office portfolio is the largest portfolio of institutional quality medical office assets in the Washington, DC region, with all of the assets located near major medical centers such as Inova Fairfax Hospital, Shady Grove Adventist Hospital and George Washington Hospital or near affluent communities and urban centers.

In January, WRIT said it would put its medical office portfolio on the market in order to streamline its operations to focus on its core office, multifamily and retail sectors. Cassidy Turley was tapped to market the portfolio.

“By successfully completing this transaction, we are able to obtain our lowest cost of equity capital, a critical step in transforming our portfolio to one focused entirely on properties where people work, live and shop,” Bill Camp, EVP and CFO of WRIT, says in a prepared statement. WRIT plans to use proceeds from the medical office sale to reinvest into downtown or metro-centric office buildings and well-located retail and multifamily assets, he adds. WRIT will also use the proceeds to pay down existing debt.