June 28, 2011
By Barbra Murray, Contributing Editor
In a partnership with affiliates of AEW Capital Management L.P., Quadrangle Development Corp. has purchased the storied 420,000-square-foot National Press Building, in the East End submarket of Washington, D.C., from Press Building L.L.C. in a transaction valued at $167.5 million.
Since completion of the National Press Building at 529 14th St. in late 1927, scores of influential persons involved in the political, cultural or societal news of the day have passed through the property’s doors to avail themselves of the forum provided by the National Press Club, which makes its home on the two highest floors of the 14-story office and retail tower. The tenant roster also includes a long, long list of media outlets.
For AEW’s part, the firm made the purchase on behalf of open-end core real estate fund, AEW Core Property Trust (U.S.). For Quadrangle, it’s an entirely different story.
Quadrangle has a history with the Class A facility. In the summer of 2004, Quadrangle came into possession of a controlling interest in the National Press Building, courtesy of a recapitalization deal that valued the asset at approximately $91.5 million and left co-owner Resource America Inc. with a 25 percent stake. According to District of Columbia property records, the sale price was $28.1 million.
With the recent completion of Quadrangle and AEW’s acquisition of the property, which underwent a comprehensive redevelopment in 1984, Resource America has walked away with $16.6 million in its pocket.
Commercial real estate services firm Cassidy Turley marketed the National Press Building for the seller and found no shortage of suitors. “We definitely had a lot of interest from a variety of both national and international real estate investment entities including REITs and pension funds,” Paul J. Collins, executive managing director with Cassidy Turley, told CPE. “People see D.C. as a pretty safe place to put their money. The government has been spending a fair amount of money here so that’s been good for the City. It’s a safe place to invest during uncertain times.”
Action speaks louder than words. As noted in a first quarter Cassidy Turley, office investment sales activity continued to pick up pace and, having reached $1.9 billion in investments during the first three months of the year, is on track to soar beyond the city’s $5.4 billion historical annual average.