Washington REIT Buys Army Club Building in DC for $79M
- Mar 28, 2014
Washington Real Estate Investment Trust continues repositioning its portfolio with the acquisition of The Army Navy Club Building, a 108,000-square-foot Class A office building in Washington, D.C., for $79 million.
Since it completed the sale of its $500.7 million medical office building portfolio earlier this year, WRIT has been focusing on boosting its multi-family and office holdings in urban areas. Harrison Street Real Estate Capital of Chicago bought the 1.5million-square-foot MOB portfolio, which had 22 buildings in Washington, D.C., Northern Virginia, Southern Maryland and Baltimore, in two phases beginning in November and concluding in January.
Over the last three months, WRIT has acquired $152 million of properties within Washington, D.C., including the purchase last month of Yale West, a Class A, 216-unit apartment building in the Mount Vernon Triangle neighborhood for $73 million. The 12-story apartment building has a three-level parking garage and is two blocks from the Washington, D.C. Convention Center Metro stop and near Capitol Hill, the East End and Central Business District.
The Army Navy Club Building is also in the CBD located on Farragut Square at the intersection of 17th and Eye streets in northwest D.C. The 12-story building was constructed in 1912 and was redeveloped and expanded in 1987. It also has a three-level parking garage and is one block from the Farragut West and Farragut North Metro stations. It is fully occupied.
The name of the seller was not released. WRIT said it had assumed a $52.6 million, 3.45 percent mortgage maturing on May 1, 2017, with additional prepayment ability beginning May 1, 2014. The balance of the purchase price came from proceeds of the MOB portfolio sale to Harrison Street.
“This iconic property, which is located on Farragut Square, aligns with our stated office strategy to purchase higher-quality assets with upside potential that are located in dense, infill locations, and offer rich amenity bases and superior access to the Metro,” Paul McDermott, WRIT CEO & president, said in a news release.
“This transaction is consistent with our objective to streamline our operating platform to refocus on our core business of office, retail and residential properties,” McDermott added. “The Army Navy Club Building represents a high-quality asset in a high-growth market that expands our footprint, strengthens our portfolio and facilitates our effort to restore long-term growth and value creation. As we continue to see market conditions improve, we will continue to pursue additional opportunities that allow WRIT to maintain a strong financial profile while also improving the overall quality of our portfolio.”
WRIT owns 53 properties totaling 7 million square feet of commercial space and 2,890 residential units, and land held for development. The properties consist of 24 office properties, 16 retail centers and 13 multi-family properties. One of the multi-family properties was acquired in fourth quarter 2013, when WRIT purchased The Paramount, a 135-unit apartment building in Arlington, Va., for $48.2 million in an all-cash transaction. The building, constructed in 1984, is within walking distance to the Crystal City and Pentagon City Metro stations.