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.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
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.
