Saban Sells, Buys $600M in Office Assets

The investment firm sold a 1.5 million-square-foot national portfolio and, as part of its strategy to acquire government-occupied properties, purchased a 340,000-square-foot building in Washington, D.C.
One Independence Square
One Independence Square

Saban Real Estate, Saban Capital’s real estate group, recently completed two office transactions totaling $600 million. The investment company sold a 14-property national portfolio and acquired an office building in Washington, D.C., which, altogether, accounted for an aggregate 1.8 million square feet of space leased predominantly to the U.S. federal government.

Easterly Government Properties Inc. bought the Class A portfolio, which spans 11 states, coast to coast, for $430 million. West Virginia is home to three of the assets, and Pennsylvania is the site of two additional assets. The remaining properties are located in California, Illinois, Louisiana, Maryland, New York, Oregon, South Carolina, Texas and Virginia. Built or renovated between 1999 and 2006, the group of properties is 94 percent leased to the federal government and 99 percent leased overall.

“The 14-property sale completes an eight-year journey with this portfolio for Saban Real Estate,” Philip Han, chief investment officer at Saban Capital Group, said in a prepared statement. During the portfolio hold, he continued, Saban added value to the assets, including “leasing over 1.5 million square feet to the federal government in eight of eleven [U.S. General Services Administration] regions.

Federal focus

Saban also added One Independence Square, a Class A office tower in Washington, D.C., to its holdings. Located at 250 E St. S.W., the nine-story tower was built in 1991 and extensively renovated in 2013. One Independence encompasses approximately 340,000 square feet and is 94 percent leased to multiple government tenants.

Saban purchased One Independence from Piedmont Office Realty Trust in a $170 million transaction.

The targeting of office properties tenanted by the federal government is part of Saban’s corporate strategy. In 2018, the company entered federal agency-laden Washington, D.C., with the $157 million acquisition of 425 I St. N.W., a Class A office building where the U.S. government claims 90 percent of the tenant roster. At the time, Han said in a prepared statement that “expanding our presence and footprint in the nation’s capital” would be a priority.

Image courtesy of Piedmont Office Realty Trust