Hines' Very Busy Week In DC

Bethesda Place I and II

BETHESDA, MD—Hines has had a three-fer in the DC area: an acquisition, a major refinance and a new tenant in one of its buildings. Let’s start with the headline news. Earlier this week it announced it acquired Bethesda Place I and II, two offices totaling 345,567 square feet from JBG Cos. The financial details of the deal were not disclosed, but public records put the transaction at about $55 million. Separately, GlobeSt.com has learned that the company refinanced One Franklin Square, the 600,000-square foot office building at 1301 K St., NW, with a $260 million loan from Mesa West Capital. Third, the company has secured Clements Worldwide as a tenant in One Franklin Square [see article below]. We don’t know if the refi of One Franklin Square is related to its new acquisition; likely not given the general rush to refi loans before interest rates start to really rise. But Hines’ plans for the properties do suggest it will be drawing on some cash — its own or a lender’s — in the near term. Hines is planning an extensive capital improvement program for its newest properties here, adding a fitness center, conference center and other amenities.  It also plans to finish the renovations that JBG began last year. Hines Managing Director Scott Martinson said the company is in the process of developing architectural plans for the repositioning. “With new tenants already showing interest, we look forward to adding value by returning the buildings to stabilization,” he said. The eight-story North Bethesda Place I consists of 160,846 square feet. The 11-story North Bethesda Place II consists of 184,721 square feet. The two buildings have a combined occupancy rate of 49%. Tenants include JBS International, the National Cancer Institute and Whole Foods Market Group’s regional headquarters. Eric Berkman, executive managing director at Cushman & Wakefield, brokered the deal.