Atlantic & Angelo, Gordon Acquire 4 Buildings in Reston, Va.

Atlantic Realty and Angelo, Gordon & Co. have high hopes for a distressed office building they partnered to buy.
Reston Corner II Reston Va.

Atlantic Realty and Angelo, Gordon & Co. have partnered on the purchase of a 499,700-square-foot office portfolio located in Reston, Va., roughly 20 miles outside of Washington, D.C. The joint venture acquired the collection of four low-rise buildings from Garrison Investment Group for $82 million in a transaction brokered by Eastdil Secured.

The portfolio includes a 297,600-square-foot office park consisting of Reston Corner I, II and III. The four-story buildings were developed in the mid-1980s and carry the addresses of 12001, 12005 and 12007 Sunrise Valley Dr. Rounding out the portfolio is the 202,100-square-foot Parkridge V, a five-story, 16-year-old property located at 10780-10790 Parkridge Blvd. within the six-building Parkridge office park.

Occupancy levels at the properties, however, are not exactly enviable. The portfolio is just 50 percent leased, with Reston Corner I being the only fully occupied building in the group. But the new owners are undaunted by the empty spaces on the tenant roster. They have a silver bullet.

“With the Silver Line Metrorail extension to Reston–the Wiehle-Reston East station now open, and the Reston Town Center station scheduled to open in 2018–Reston has become an even more desirable business location,” a spokesperson for Atlantic Realty told Commercial Property Executive. “With some 50 shops, restaurants, and entertainment destinations, Reston Town Center has, for some time, commanded higher rents than other nearby office properties. But vacancy rates are starting to go down, and rents are rising in other parts of the submarket thanks to Metro.

Indeed, vacancy rates in Reston have been on the downswing for a few years, going from 16 percent in 2012 to 14.4 percent in 2014, according to a report by commercial real estate services firm DTZ.

“So due to the effect of the Silver Line and the generally improving economy–along with the favorable pricing of this acquisition, just above the properties’ assessed value–this is a good investment,” the spokesperson concluded.

The ARC-AG joint venture is just one of many office-property investors that see opportunity written all over Reston. Transactions during the first quarter of 2015 include American Real Estate Partners and Square Mile Capital Management L.L.C.’s acquisition of the 179,000-square-foot Reston International Center, and Columbia Property Trust Inc.’s purchase of the 245,000-square-foot building at 1881 Campus Commons Dr