WASHINGTON, DC–The Sentinel Square II project located at 1050 First St., NE, has sold to a Korean investment group, Sentinel Square Hana OW, LLC — an entity associated with Hana Asset Management. The recorded price for the trade is $147 million.
The transaction was a fairly complex one in that the seller contracted the trade in the summer of 2016 but it first had to complete the tenant improvement projects for two tenants before it closed, explained Thomas Finan, a managing director in Trammell Crow Co.'s MidAtlantic office, to GlobeSt.com. “There were a lot of moving parts to getting the improvements done,” he says. Trammell Crow Co. and joint venture partners, Cottonwood Partners and a subsidiary of a private real estate fund advised by Crow Holdings Capital Real Estate, were the sellers of Sentinel Square II, which is part of the partnership's three phase, 1.3 million square foot office complex in the heart of NoMa.
Hana Asset Management acquired the NASA headquarters last year and is familiar with the benefits of government-occupied real estate, Finan says. “They are a believer in Washington DC and doubled down on the city with this purchase.”
Sentinel Square II is part of the project's second phase of construction. It was built on a spec basis with a government tenant in mind — the complex is designed to meet ISC Level IV security protocols — but the building delivered just as the federal government was shying away from major commitments. The building was empty for close to three years. Today it is home to the District of Columbia's Office of the State Superintendent of Education and the Department of Insurance, Securities and Banking, as well as the US Federal Election Commission. The building is 95% leased and tenant move in is expected to be completed in the first quarter of 2018.
In September, TCC completed the sale of the new Federal Communication Commission headquarters at Sentinel Square III to an institutional investor joint venture advised and managed by MetLife Investment Management.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
