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Washington REIT: Epstein, Becker Renewing 55,000 SF

WASHINGTON, DC—The law firm is located at 1227 25th St, NW, which the Advisory Board is vacating.

By Erika Morphy | erikamorphy | | Updated on February 23, 2016
1227 25th St, NW 1227 25th St, NW
WASHINGTON, DC—Washington REIT is doing fine, per the REIT’s quarterly earnings report. How fine? Well, Core Funds from Operations, a key REIT metric, was $1.71 per diluted share for the year and $0.46 per diluted share for the quarter ended December 31, 2015, as compared to $1.63 per diluted share and $0.43 per diluted share, respectively, for the corresponding periods in 2014.  The REIT also executed new office leases totaling 220,000 square feet at an average rental rate increase of 21.1%. The most visceral example of its well-being, though, is the news that Epstein, Becker is renewing the 55,000 square feet or so it occupies at 1227 25 th St., NW. “They have recently committed to renew with us and we’re in sort of the final stages of getting that renewal completed, CEO Paul T. McDermott said in last week’s earnings call.  “And so that’s the big one on the horizon this year for us.” According to JLL’s revised Q4 Office Insight report, the renewal was all but a done deal by the end of the fourth quarter of 2015. It said that:
Leasing activity among private sector tenants larger than 20,000 square feet totaled 0.9 million square feet in the fourth quarter. Most notably, Steptoe & Johnson and Epstein Becker & Green decided to renew and renovate their spaces at 1330 Connecticut Avenue, NW and 1227 25th Street, NW, respectively.

1227 25 th St., NW, you may remember, is being vacated by the anchor tenant, The Advisory Board. The company took up 300,000 square feet between 1227 25 th St and 2445 M St. Presumably Washington REIT gave Epstein, Becker a good deal. In the last earnings call, when it was still uncertain whether the law firm would stay, one of the executives said that “we are working through a financial structure with them that we hope will keep them, but we still have not made a deal yet.”

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