WRIT Purchases 248,000-SF Sullyfield Commerce Center

ROCKVILLE, MD-In an all-cash, $21.6-million deal, Washington Real Estate Investment Trust (WRIT) acquires Chantilly, VA’s Sullyfield Commerce Center. Excluding rent income, the 248,000-sf property is expected to yield a first-year return on a leveraged basis of 11%.

The 16-year-old property is leased to capacity with nine tenants, including Airborne Freight Company and TRW Inc. Subsidiaries of Marriott International and Thermo Electron also lease space at Sullyfield. WRIT can anticipate an increased profit from 51,000 sf of the property in 2003 and 2004 when leases expire for businesses occupying that space, which is reportedly rented at 40% below market value. Only 2.5% of the property’s leases will expire within the first 24 months.

Acquiring Sullyfield is part of WRIT’s business plan to invest in property with increased long-term investment potential. Company officials expounded upon their plan last month when it sold a Kensington, Maryland building for $8.4 million. In a statement discussing that transaction, WRIT Chairman and CEO Edmund B. Cronin Jr. explains that the sale, “is pursuant to our strategic plan to dispose of properties which do not fit our long-term objectives.” Money from a tax-deferred exchange from the Kensington building sale partially funds the Sullyfield purchase.

Sullyfield Commerce Center is part of the Sullyfield Business Park complex, which encompasses 36 buildings for a total of 1.7 million sf. WRIT’s purchase of the two-building flex and industrial center within the business park marks the company’s third acquisition in that region–WRIT also owns nearby Dulles South IV and Sully Square. The self-managed equity real estate trust has a total of 58 properties, including office properties, retail centers, industrial/flex properties, and multi-family structures.