NEWS & NOTABLES

SUBURBAN MARYLAND–Everyone has a theory as to why investment sales are down, the most common being confusion from the White House and Congress over policy and the inevitable maturing of the real estate cycle. MacKenzie Commercial Real Estate offers a slightly different take in its second quarter outlook:

Anecdotally, we believe that a big reason why investment sales volumes are down is that the investors buying the properties can't seem to make sense of the prices owners are asking. This disconnect between sellers' and buyers' expectations has led sellers to take property off of the market, or deals to take longer to consummate than they anticipated. Deals are harder to find, and once they are found, the financing component of the deal remains a key variable of the business plan as the impact of leverage can make or break an investment return. This is true for development financing as well.

Separately, Ten-X has listed suburban Maryland among its top five “sell” office markets. Its reasons why:

Suburban Maryland has seen recent growth in the professional/business services sector, which accounts for more than one-fifth of the region's jobs. Unemployment had been falling for several years, but now has stalled at around 3 percent – a figure below the national average. A recent population surge has cooled, with the region posting a population increase of just 0.6 percent in 2016. Negative office absorption has helped boost vacancy rates in five of the past six quarters. The report foresees rental growth at a 1.3 percent pace through 2018, a figure behind the national rate. But tepid absorption and rents will keep NOIs down, with contractions sharper than the national average during the Ten-X 2019-2020 downturn scenario.

DEAL TRACKER

TYSONS, VA–Hogan Lovells is moving its Northern Virginia office to Meridian Group's Boro Tower, a new 20-story trophy office tower under construction at The Boro in Tysons. The law firm will lease 44,500 square feet starting in June 2019, occupying the tower's entire 17th floor and half of its 16th floor. The firm will relocate from its offices at Park Place II at 7930 Jones Branch Dr. in McLean.

RICHMOND–Keith Wells, senior vice president/managing director of NorthMarq Capital's Richmond regional office, arranged permanent financing of $10.8 million for the GSA Gov. building, a 53,917 square foot office property located in Norfolk. The transaction was structured with a fixed rate, five-year term on a 25-year amortization and is pre-payable at par, non-recourse.

WASHINGTON, DC–Ampeer — the renovation of the legendary Patterson Mansion in Dupont Circle — has opened its doors. It offers 92 residential units, communal living spaces, food and drink service and events programming to Ampeer's target audience of transient professionals. Saul Urban and Rooney Properties developed the property. The concept, which debuted in DC, will be replicated in other major international cities.