Pair of Non-Premier Office Properties in Bustling D.C. Command $62.5M
- Apr 03, 2008
The office buildings at 1000 and 1010 Vermont Ave. in Downtown Washington, D.C., rating Class B and Class C, have just come under new ownership. Pembroke Real Estate Inc. acquired the properties, totaling 141,800 square feet, from Guardian Realty Investors L.L.C.Consisting of nearly 78,400 square feet, the structure at 1000 Vermont was developed in 1950 and submitted to a comprehensive renovation in 1985. Its sister building at 1010 Vermont features approximately 63,400 square feet of space. Originally constructed in 1921, 1010 Vermont was most recently upgraded in 2001. Together the buildings have an average leasing level of 96 percent. Occupying nearly 18,300 square feet, Americans for the Arts is the lead tenant. Other businesses that call Vermont home include Citibank F.S.B., Federal News Services Inc. and Habitat for Humanity. The properties, which straddle the CBD and East End submarkets, present the new owner with two lucrative opportunities. In place rents at the Vermont buildings, according to Cassidy & Pinkard Colliers, which orchestrated the sale on behalf of Guardian Realty, are 20 percent below market rate, leaving the opportunity for significant profit as leases turn over. Rental rates for Class B properties in the District average out at $41.81 per square-foot, compared to $48.07 for Class A space, as noted in a fourth quarter report by real estate services firm GVA Advantis. Alternatively, given the strong demand for Class A space, the buildings could be redeveloped into premier properties. “The reasoning behind purchasing Class B and Class C buildings is renovation, and we’re seeing more and more of these buildings being torn down, and starting all over again, ” Tonya Ginter, GVA Advantis director of research and marketing, told CPN today. “We’re seeing that across the board in D.C. because there’s just not a lot of land to purchase in the CBD or the East End, which are the hottest markets.” National Public Radio, for example, recently announced that, having acquired a 165,000 square-foot warehouse currently used by the Smithsonian Institution in the burgeoning NoMa district, it would convert the structure into its new 400,000-square-foot headquarters.