France’s AXA Investment Snags $165M Office Asset in DC

The Paris-based real estate assets investment and management firm acquired the 210,000-square-foot trophy property in a joint venture with Stewart Investment Partners.

1401 New York Ave. in Washington, D.C.
1401 New York Ave. in Washington, D.C.

Paris-based AXA Investment Managers – Real Assets has snapped up a prime piece of the Washington, D.C., office market on behalf of a client. In a joint venture with Stewart Investment Partners, the real assets investment and management firm purchased a majority stake in the 210,000-square-foot trophy property at 1401 New York Ave., NW, for $165 million.

The sellers were Heitman LLC and Minshall Stewart Properties, the latter of which is the predecessor firm of Stewart, which was spun out from Minshall following the closing of the office transaction. History has its advantages. In a prepared statement, Aaron Kutner, Head of U.S. Acquisitions at AXA IM – Real Assets, said the company will capitalize on “leveraging [Stewart’s] significant experience of both this asset specifically and the local market with the aim to maximize the value of this investment for the benefit of our clients.”

Developed by real estate services company Akridge, 1401 New York sprouted up on the former site of the National Food Processors Association in the East End submarket in 1983. The 12-story tower last traded in 2013, when Heitman and Minshall scooped it up for $95 million.

Also featuring 8,800 square feet of street-level retail space, the LEED Gold-certified property was most recently renovated in 2016. AXA has high hopes for the office destination. “1401 New York Avenue’s close proximity to the White House, floor to ceiling window line, rooftop terrace and market leading amenity set is expected to positively position the property to outperform the market and deliver strong long-term investment results,” Kutner said.

AXA is no stranger to the D.C. office market. The company made its most recent purchase in the area in October 2017, grabbing a majority interest in the 367,000-square-foot Montgomery Tower in Bethesda, Md., for $139.8 million. However, it’s not just the nation’s capital that’s high on AXA’s radar; the company has been busy acquiring assets across the country. In October the company bought a 264,000-square-foot office property in Dallas.

Simply irresistible 

AXA is just one company among a sea of global real estate investors that find themselves practically powerless to resist the U.S. real estate market. Results of a new survey by the Association of Foreign Investors in Real Estate indicate that 58 percent of international real estate players still consider the U.S. the most stable country in the world for investment. And a full 86 percent of survey participants revealed that they expect to maintain or increase their investment activity in the U.S. in 2018.

Per the AFIRE survey, respondents attribute their enthusiasm for the U.S. market to several strengths, including the country’s “strong, stable economy, transparent capital markets, and reputation for innovation.”

Cross-border transactions in the last few months of 2017 include South Korean investment firm LA Hana OW LLC’s acquisition of the 460,000-square-foot DreamWorks Headquarters and Studio Campus in Glendale, Calif., for $290 million. Chinese investment and development firm Beijing Ideal Group purchased One Newark Center, a 423,000-square-foot building in Newark, N.J.  Canada’s Bentall Kennedy, acting on behalf of Kuwait-based Warba Bank K.S.C.P., acquired a 223,000-square-foot single-tenant building in the Denver suburb of Englewood, Colo. And the list goes on.

Image courtesy of Yardi Matrix