MetLife, Norges Bank Buy Big in DC

The joint venture partners paid nearly $422 million for the Three and Four Constitution Square office buildings.

By Barbra Murray, Contributing Editor

Constitution Square, Washington, D.C.
Constitution Square, Washington, D.C.

Washington—In their latest joint venture move, MetLife Inc. and Norges Bank Real Estate Management have acquired Three and Four Constitution Square, two office buildings featuring an aggregate 842,000 square feet of space in Washington, D.C. The partners purchased the towers from the developers, StonebridgeCarras and Walton Street Capital LLC, for approximately $421.8 million.

According to StonebridgeCarras, the total project cost for Three and Four Constitution, the latter of which is presently under development, is $350 million.

Featuring the respective addresses of 175 N. St. and 150 M St., Three and Four Constitution lie in the burgeoning NoMa submarket in Northeast D.C., and constitute the final phases of the 2.6 million-square-foot Constitution Square development. Premier buildings in a premier location—it’s quite a package. The 349,000-square-foot Three Constitution, a 12-story tower that also features 12,000 square feet of ground-level retail space, reached completion in 2013; the 493,000-square-foot Four Constitution is on track to open its doors in 2018—and they’ve both been claimed by a single tenant. In D.C.’s largest new lease transaction of 2015, the U.S. General Services Administration signed a 15-year agreement to occupy the office space in both buildings last October.

“Constitution Square in Washington, DC, represents the opportunity to add a high-quality, fully leased asset in a core market to our joint portfolio with Norges Bank Real Estate Management,” Robert Merck, senior managing director with MetLife Inc., said in a prepared statement. “Our continued partnership is built on a strategy of providing first-rate asset management and investing for the long-term to bring strong returns to our stakeholders.”

MetLife owns a 52.5 percent share of the two-building property and will serve as manager on behalf of the joint venture. Norges Bank, which shelled out $71.3 million of the $200.4 million of its share of the purchase price, owns the remaining 47.5 percent.

MetLife and Norges Bank now own five properties together. The companies formed their joint venture for the acquisition of Class A office assets in prime U.S. markets in 2013, and kicked off the partnership with the purchase of the 1.3 million-square-foot One Financial Center in Boston. The joint venture also owns 555 12th St., NW. in Washington, D.C., and 425 Market St. in San Francisco, both of which the partners snapped up in 2014. They also acquired One Beacon St. in Beantown in 2014.