WASHINGTON, DC-Federal Capital Partners and Angelo, Gordon & Co. have sold one of FCP’s first investments: the Flour Mill, an office building located at 1000 Potomac St, NW, to an undisclosed buyer. The amount of the sale was over $50 million, according to FCP.

A 125,000-sf, eight-story office building originally built in 1980, the Flour Mill sits between the Potomac River and the C&O Canal on a full city block in the Georgetown submarket. Federal Capital Partners was represented by Eastdil Secured’s Washington, DC office.

As is typical for the company’s investment strategy, the Flour Mill was core asset acquired to deliver a value add return for the firm. FCP acquired it in 2003 when it was a class B building, Howard Jenkins, a VP at the company tells GlobeSt.com. According to Tonya Ginter, director of research and marketing for GVA Advantis FCP acquired the building for $25 million, or $202 per sf.

Since the acquisition the company invested “in excess of $3.5 million” in rehabilitation and capital improvements, he says. These include improvement to HVAC and electrical systems and a renovated lobby and elevator cabs. It also upgraded and re-landscaped the outdoor plaza area.

Now, Jenkins says, the building has the equivalent of “class A” prestige. “Tenants recognize that based on the rents we have been able to capture.” Today, the building is 99% occupied, Jenkins notes, after having leased, renewed or expanded 80% of the net rentable space. Leases have been signed with tenants in excess of $40 per sf, he says.

At 3 million sf, Georgetown is a small market and thus investment sales are relatively fewer than in other parts of the city. In March 2007, Western Development Corp. acquired two properties totaling roughly 453,000 sf at 3222 M St. for $185.14 per sf.

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