FAIRFAX, VA—Korth Investment Properties Group has acquired a relatively small building here called the Mosby. It is a six-story 114,000-square foot office and retail building that trded for $15.25 million. The seller was a local LLC represented by NAI KLNB's Christopher Kubler, Brad Berzins and Josh Simon.
The building, called Mosby Tower, is a bit unusual in that it was once an apartment complex -- the still-strong darling asset class of the investment community -- but then partially transformed into office space. The former owner invested more than $250,000 to transform 11,000 square feet of available space into a "Premier Suites" space, meaning that the tenant doesn't have to invest in a build out as it is ready to move in.
In this case the investment made sense – office space demand in Northern Virginia is heading up and small office space fundamentals tend to perform better, according to NAI KLNB. "Leasing fundamentals for small suburban office spaces are superior to that of larger spaces and, by attracting a higher quantity of tenants to the building, financial risk is diversified," Kubler says in a prepared statement.
Suburban office listings do tend to lackluster, Simon noted in the statement, but the two-asset approach intrigued bidders in this case.
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