JPMorgan Chase Buys DC Building for Regional HQ
- May 03, 2018
Just weeks after announcing it was opening 70 branches in Virginia, Maryland and Washington, D.C., JPMorgan Chase acquired the Bowen Building in Washington’s CBD from JBG Smith. The 12-story asset, which was 86.1 percent at the time of sale, changed hands for $140 million and will serve as the investment bank’s first regional headquarters.
The Bowen Building is a 231,000-square-foot Class A property at 875 15th St. N.W., at the corner of McPherson Square. Its lead tenant, law firm Paul Hastings LLP, will be moving to Tishman Speyer’s 2050 M St. N.W. in approximately two years, according to the Washington Business Journal. JBG Smith will continue to provide property management services for the building.
Built in the 1920s, the historic office property will undergo renovations next year, with JPMorgan Chase expected to move in by 2021. The global financial services giant will continue to operate offices in Tysons Corner, Norfolk and Richmond, Va., and Baltimore to serve small and mid-sized businesses. It has also opened a new office in Bethesda, Md.
“We are deeply committed to the region and have been growing our business here for nearly 20 years. This new regional headquarters and branch expansion in Greater Washington will help us continue to invest here long term and play our part in continuing to grow the economy of this great region,” Peter Scher, chairman of the Mid-Atlantic region with JPMorgan Chase, said in a prepared statement.
The property was part of the office portfolio owned by Vornado Realty Trust through its Vornado/Charles E. Smith unit. JPB Smith, which has a mixed-use portfolio of approximately 20 million square feet and a development pipeline of 17.9 million square feet, was created last year through a merger of JBG Cos. and Vornado/Charles E. Smith. For the past several months, JBG Smith has been taking advantage of the strong D.C. market investment to recycle capital and deleverage its balance sheet and reinvest the sale proceeds in higher-yield growth opportunities.
“We continue to execute our strategic recycling program with the sale of the Bowen Building to JPMorgan Chase, who plans to own and occupy the property. Year to date, we have executed over $335 million of asset sales and recapitalizations, and we will continue to pursue opportunities to capitalize on the attractive market environment that exists today,” Matt Kelly, JBG Smith CEO, said in a prepared statement.
One disposition occurred in early April, when the firm completed the $95 million sale of Summit I and II in D.C.’s submarket of Reston, Va., to Brookfield Property Partners.
In March, JBG Smith and Canada Pension Plan Investment Board formed a joint venture for 1900 N St. N.W. CPPIB paid approximately $100 million for a 45 percent interest in a 271,000-square-foot office building under construction near the Dupont Circle Metro Station.
Meanwhile, JBG Smith continues construction of its new headquarters in Bethesda. The 14-story, 287,000-square-foot building at 4747 Bethesda Ave. will have 200,000 square feet of office space and 7,000 square feet of retail. The firm is expected to take about 95,000 square feet of the building that is due for completion in late 2019.
Images courtesy of JPMorgan Chase