Crystal City Office Tower Sells for $100M
- May 21, 2019
Starwood Capital Group has acquired Presidential Tower, a 349,303-square-foot, Class A office building in Arlington, Va., from Beacon Capital Partners. The new owner received $98.5 million in financing from Société Générale and MetLife to acquire the property, and the full price of the building was reported to be around $100 million.
Located at 2511 Jefferson Davis Highway in National Landing, the 12-story building is situated just two blocks away from the upcoming Amazon HQ2 site. Presidential Tower is nearby Reagan National Airport and has convenient access to the Crystal City Metro Station.
“The major appeal is that it’s located a couple of blocks from Amazon HQ2 in what most people would view as the most transitioning market within Washington, D.C., right now,” Jud Ryan, Newmark Knight Frank’s executive managing director, told Commercial Property Executive. “Even though we’re early in the announcement by Amazon and they haven’t yet moved into their space, we can draw a parallel to other markets like Seattle and understand the amount of growth that occurred after Big Tech landed.” Generally speaking, over a 10-year period of time following a big tech company coming to an area, Ryan noted, rent growth normally increases by 5 to 10 percent.
At the time of the sale, Presidential Tower was 93 percent leased, with a tenant roster consisting of technology companies, defense contractors and the federal government.
In 2013, Beacon Capital Partners began a major renovation of the building, which included modernizing the main lobby, restrooms and corridors, as well as the addition of top-class amenities.
Joining Ryan on the deal were NKF’s Executive Managing Director James Cassidy & Co-Head of U.S. Capital Markets Robert Griffin. The brokerage firm represented the seller.
This is the first office building to close in or around National Landing this year, but several multifamily properties have sold.
Earlier this week, Amazon released plans for the first phase of construction of its Arlington-based HQ2 campus, which will eventually house 25,000 employees. Since March, Amazon has signed deals to lease more than 500,000 square feet of space with JBG Smith and received approval for all government incentives and investment packages from the state of Virginia.