The class B building is currently occupied by tenants that include the General Services Administration, the American Forestry and Paper Association, and Ogilvy Public Relations. Cassidy & Pinkard is the leasing agent for the building. Grubb & Ellis will be the manager.
[IMGCAP(2)]Marc DeLuca, director at ING Clarion, describes the building as a solid investment "in a market with a diverse, resilient economy, relatively low unemployment, and good long term prospects for job growth." Among the submarket's fundamentals that the firm likes are new office construction that is expected to peak in 2009; an overall vacancy rate for office space that should remain in the 5% range; rent growth that is expected to average 3.9% annually through 2012; and the presence of the federal government.
With a 96% occupancy rate, Tonya Ginter, director of Research and Marketing at GVA Advantis tells GlobeSt.com that this trade is reflective of a relatively new trend in DC: investment sales of predominately leased buildings, compared to the value-add plays many investors like prior to the credit crunch.
The trade, which closed in time to make it into Q1 calculations for the District, starkly illustrates the decline in activity seen here. According to figures GVA Advantis plans to release in the coming week, office investment sales in the DC metro area equaled some $520.8 million--down from Q4 2007's $2 billion sales. At $115 million, the ING-Blackstone transaction represented a quarter of DC's office sales activity, Ginter notes. "Generally sales are slow at the start of the year but that kind of drop is alarming."
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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.
