Two DC Office Buildings Sell for $259M
- May 01, 2017
Westbrook Partners and TIER REIT recently sold 1325 and 1341 G St. (the Colorado Building), two Class A office buildings in Washington, D.C.’s East End submarket, to UNIZO Holdings Co. for $259 million.
HFF represented both parties in the 440,419-square-foot, off-market transaction.
“TIER’s overall strategy is to focus our efforts on our seven target growth markets of Austin, Dallas, Houston, Charlotte, Nashville, Atlanta and Denver,” Scott McLaughlin, TIER’s senior vice president – investor relations and tax strategy, told Commercial Property Executive. “This sale helps us further implement that strategy.”
TIER REIT has exited four non-target markets year to date, and currently operates in eight markets across the U.S. In January, the REIT completed three transactions totaling $217.7 million, including selling two office buildings in Philadelphia and Burbank, Calif.
The two buildings in the transaction are located just two blocks from the White House and one block from the Metro Center metrorail station. The 307,705-square-foot 1325 G St. building was originally built in 1969 and renovated this year. Recent renovations to the property include a new lobby, storefront canopy and selective tenant common areas.
The Colorado Building was originally built in 1903. It has 132,714 square feet of office and retail space.
In 2015, HFF arranged a joint venture between Westbrook and TIER REIT, which undertook a significant repositioning of the buildings, including a lobby renovation. TIER REIT sold a 90 interest in the properties as part of the transaction.
HFF has seen strong demand for high-quality assets in prime locations with occupancy, term and diversified rent rolls. The firm noted that D.C. is a new core market, and is highly appealing to safe haven capital/global yield investors.
The buildings are 90 percent leased to 32 tenants, with average lease terms of eight years.
The HFF investment sales team representing the seller was led by Andrew Weir, Stephen Conley, Jim Meisel, Dek Potts and Matt Nicholson.