The sales price equates to about $339 per sf, a new record for a Downtown office building. It is approximately 16.5% higher than the $291 per sf that California-based KBS Realty Advisors paid to Continuum Partners last year for the 206,000-sf 16 Market Square.
Government Properties, a real estate investment trust that invests in single-tenant, government buildings, expects to close on the transaction when it is occupied by the EPA in late December. The General Services Administration, on behalf of the Environmental Protection Agency, has executed a 10-year lease on the building.
EPA execs say it will be one of the most energy-efficient buildings in the metro area when it opens. Approximately 16,000 sf of the building will be available for street-level retail space, and the project includes 225 on-site underground parking stalls and 122 off-site surface stalls.
"We are quite pleased to secure this project," says Thomas D. Peschio, president and CEO of Government Properties Trust. "It is excellent real estate, well-designed and properly situated to serve as the regional headquarters of an essential governmental agency under a long-term lease with a high probability of renewal. This type of property fits quite well with the long-term growth strategy of this company."
Government Properties is in the process of securing fixed interest rate financing for the underlying first mortgage that will be placed on the property at the time of closing. A forward interest rate lock has been put in place pending completion of the project. While this property has been placed under a binding contract, there is no assurance the transaction will close or will close as scheduled, Government Properties execs caution. Construction is not complete and there are no assurances that it will be completed on schedule, they add.
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