Rockefeller, Mitsubishi Time D.C. Market

Timing is everything, and current D.C. office valuations are hard to ignore.

By Barbra Murray, Contributing Editor

Courtesy Google Maps.
Courtesy Google Maps.

It’s official: the Rockefeller Group U.S. Premier Office Fund LP and Mitsubishi Estate New York have completed the sale of the office building at 1101 K St. NW in Washington, D.C. According to a source with knowledge of the deal, the joint venture partners sold the premier 292,000-square-foot property to UBS for approximately $260 million.

The Rockefeller/MENY joint venture had owned the Davis Carter Scott-designed 1101 K St. since 2011, when it picked up the downtown D.C. property for $199 million from its developers, JBG Cos. and Rockwood Capital. The partners have since taken the occupancy level at the 10-story tower, originally developed in 2006, from 80 percent to roughly 96 percent.

Class A building, prime location, a near full tenant roster—Rockefeller/MENY had every reason to follow through with its projected hold period. But timing is everything, and office property values in D.C., right now are hard to ignore.

Indeed, office transactions in the nation’s capital have been carrying high price tags. In the largest sale of the first quarter, America’s Square, a 466,000-square-foot complex, traded for $500 million, or $1,083 per square-foot.

Atsushi Nakajima, President & CEO of Rockefeller Group

Rockefeller, which had made its entrée into the D.C. market with the acquisition of 1101 K, remains quite keen on the city, as well as other highly coveted locales.

“Our investors are positive about the prospects for core and core-plus properties in major U.S. markets, especially longer-term. From an investment perspective, we continue to focus on gateway markets, Washington, D.C., Boston, New York, San Francisco and L.A., looking for quality assets that can benefit from our operating expertise,” Atsushi Nakajima, president and CEO of Rockefeller Group, told CPE.

And Rockefeller has construction on its mind as well. Nakajima added, “On the development side, we’re pursuing office, industrial and residential opportunities on a broader scale and building on a speculative basis where the supply and demand equation gives us confidence in the near-term outlook.”