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ROCKVILLE, MD—Two properties here, a 62,000 sf shopping center and a 251,593 sf class A office building, have traded hands through a 1031 transaction. Local investment group Glenrock Joint Venture sold Travilah Square Shopping center, located at 10016-10072 Darnestown Rd., for $22.1 million. As typical in a 1031, it then formed WM&D LLC to purchase Gateway Office Tower, located at 401 N. Washington St., for $70 million.
The buyer of the shopping center and the seller of the Gateway Office Tower were undisclosed, although a source says that the off-market office sale was part of a portfolio acquired by an institutional investor this summer.
Andy Stape, Joe Friedman and Jamie Abrams of Transwestern Commercial Services' ASSET Investment Sales Group and Wes Scott and Jim Bonham, of Transwestern's Finance Group brokered the transaction. The ASSET Investment Sales Group specializes in suburban commercial assets in the Washington-Baltimore Region.
This 1031 exchange was somewhat unusual, Friedman tells GlobeSt.com, as Glenrock insisted on a simultaneous acquisition when it made the sale. Typically, a 1031 has a set number of days to acquire a property to avoid capital gains tax, but in this case the owners did not want to risk it, Friedman says. "Other than that it was a classic real estate trade – they sold a minnow and then bought a whale."
Glenrock Joint Venture originally developed Travilah Square in 1985 and renovated the facade in 2004. Small tenants consisting of retail, restaurant and other service providers lease space in the neighborhood shopping center and two-story office complex, which is 100% occupied.
Gateway Office Tower is located just half a mile off of Rockville Pike and is close to I-495, I-270 and the Rockville metro station. The property, which was built in 1972 and renovated in 2002, is 93% occupied to regional and national tenants.
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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.
