JV Buys Class A Office in Downtown DC
- May 03, 2018
DSC Partners, in a joint venture with Wafra Inc., has acquired for $100 million the 178,000-square-foot, 12-story, Class A office building in Washington, D.C., on behalf of an institutional investor. The seller was RREEF Property Trust, which had purchased the property from TA Associates Realty for $73.8 million in 2006, according to Yardi Matrix data.
The building was completed in 1982 and renovated in 2007 and is located at 1250 Eye St. N.W., one block from the McPherson Square Metro Station, two blocks from Metro Center Metro Station and two blocks from CityCenterDC. The asset features 15,300-square-foot floorplates and 196 below-grade parking spaces.
The new owners plan a nearly $5 million capital improvement plan that will include a fitness and conference center on the second floor, cosmetic renovations, retail façade improvements and mechanical upgrades.
The property is 70 percent leased by 16 tenants, including HKS Architects, eBay and PayPal, the American Hotel & Lodging Association, and the Distilled Spirits Council.
“We saw this as a rare opportunity to acquire and reposition a high-performing, conveniently located building, effectively reintroducing it to the tenant and brokerage market,” DSC Partner Principal Nick Smith said in a prepared statement. “Our immediate capital improvement plan focuses on modernizing the building’s common areas and adding the building’s first-ever fitness center, conference center and tenant lounge.”
James Cassidy and Jud Ryan of Newmark Knight Frank represented the seller, while Joe Donato of NKF arranged the financing on behalf of the joint venture. Brendan Owen and Morgan Monroe of NKF will lease the office space, and Dochter & Alexander Retail Advisors will lease the retail.
DSC Partners is a venture recently founded by Smith and by Douglas Donatelli. The partnership acquires properties throughout the Washington metro area, targeting value-add and Class A opportunities. Founded in 1985, Wafra is a U.S.-registered investment adviser beneficially owned by the Public Institution for Social Security of Kuwait, an autonomous agency controlled by the State of Kuwait.
An evolving neighborhood
1250 Eye St. is barely two blocks from CityCenterDC, the 10-acre mixed-use project that was developed on the site of the former Washington Convention Center. Though the bulk of CityCenterDC was completed by 2013, one last piece remains to be finished: the 360-key, $250 million Conrad Washington luxury hotel. Developed by Hines and by Qatari Diar, the hotel is scheduled for completion next year.
The office building is also catercorner to Franklin Square, which will undergo a $14 million renovation next year, to include an interactive fountain, cafe, children’s play area and pedestrian mall. The renovation is being undertaken by the Downtown DC Business Improvement District, District of Columbia government and National Park Service, which owns the 5-acre park, a DSC spokesperson told Commercial Property Executive.
Image courtesy of DSC Partners