Dune, Penzance JV Acquires 188 KSF Office Building in DC for $64M
- Oct 09, 2013
Federal Capital Partners and Penzance have sold the office building at 1101 Connecticut Ave. NW, in Washington, D.C. to a new joint venture, well, half-new. Penzance teamed up with Dune Real Estate Partners to acquire the downtown asset for $64 million.
Joint venture-ownership has been the name of the game at 1101 Connecticut for the last several years. Penzance purchased the asset in 2006 in a joint venture with North American Property Partners L.P., before becoming co-owner with FCP in 2010. Three years later, Penzance has found a new partner in Dune. For FCP, the timing was right to bid adieu to 1101 Connecticut, not that the company was unhappy with the prominently-placed, 94 percent leased corner property.
“We hit our financial goals for the asset and the building was getting to the point where there were some longer-term strategic opportunities–renovation opportunities, for example–and it made sense for somebody who could start fresh to do it,” Thomas Carr, managing partner with FCP, told Commercial Property Executive. “We were able to accomplish all of our objectives for our investment and exit in a way that was happy for our partner.”
And FCP likes to keep its partners happy. The transaction with Penzance and Dune marks the second time in the last few months that FCP sold to its co-owner; in August, the company sold its stake in the 332,000-square-foot National Cancer Institute Building in Frederick, Md., to its development partner, The Matan Cos.
” We love these situations where it’s really a win-win for our partners, and we strive for that,” Carr added.
Commercial real estate services firm Cassidy Turley orchestrated the 1101 Connecticut disposition on behalf of FCP and Penzance, and had no worries about finding a new partner for Penzance. The Washington, D.C., office market is still high on investors’ list.
“Certainly downtown Washington continues to get a lot of interest from both domestic and international investors,” Bill Collins, vice chairman & principal with Cassidy Turley, told CPE. “It is still perceived to be one of the real safe havens in terms of real estate investments.”
Not even federal government ups and downs have dissuaded investors. “The funny thing is, I think a lot of people had a lot of anxiety and doubt about it 24 months ago and watched the government at work and, as hard as it is sometimes to watch the sausage being made, realized that at the end of the day these guys are going to work it out,” Collins added. “So most of the people you talk to are saying, ‘I see what’s happening right now; if I wait until there’s 100 percent clarity, then I’ll be too late so I need to be a part of the market now.’ And the anticipation is that the fundamental of the market will improve in the ’15, ’16 ’17 timeframe, but you’ve got to be in early. You can’t be in late.”