COLUMBIA, MD—Corporate Office Properties Trust has acquired a majority stake in a trophy office project that Akridge has been planning to build in DC's southwest corner of 21st and L streets in the CBD.
The REIT announced the deal, which technically is a joint venture, as part of a series of end-of-the-year transactions, which included the sale of two properties in Baltimore, leases for build-to-suit developments and an upwardly revised projection of investment sales it expects to make next year.
COPT and Akridge have formed a JV to "acquire and improve the land" at the site, which is located at the western-edge of the Golden Triangle submarket. Akridge has envisioned a 190,0000-square foot office at the site, which would have the address of 2100 L St, NW. The design elements and specs for the 10-story building include floor-to-ceiling glass, a two-story lobby, an art gallery, fitness center and 8,000 square feet of retail space.
Construction could start in early 2017, with delivery in late 2018 or early 2019. The JV will be seeking debt to fund the construction costs, while COPT will contribute the equity using proceeds from land sales it expects to make next year.
Build to Suit
COPT also announced that two projects in suburban Maryland and Northern Virginia are 75% pre-leased and that it will invest an incremental $55 million to start construction. These projects are:
The National Business Park in Annapolis Junction, MD, where a defense contractor has signed a 50% pre-lease for a 144,500 square foot project that will be the first building in the park's 500 series.
The third and final building at Patriot Point in Ashburn, VA, where COPT is finalizing a long-term lease with a subsidiary of an investment grade Fortune 500 company for a 149,000-square foot shell building in the second quarter of 2016.
Investment Sales, Now and Next Year
COPT has also sold two buildings in Timonium, MD, for $44.5 million, or $181 per square foot.
And finally, the REIT said it was upwardly revising its projection of 2016 property sales from its original forecast of $225 million to between $400 million to $425 million "given the growing demand for newly developed space in our strategic markets and the liquidity of the disposition environment," said CEO Roger A. Waesche. In other words, the company is expecting a strong year and little wonder given the bang with which it is ending 2015.
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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.
