WRIT Buys DC’s Spring Valley Retail Center for $40.5M
- Oct 09, 2014
Washington Real Estate Investment Trust has completed its fourth consecutive acquisition in 2014. At the start of October, WRIT announced the off-market acquisition of Spring Valley Retail Center for $40.5 million. So far this year, the real estate investment trust has invested approximately $300 million.
The Spring Valley Retail Center is a 75,265-square-foot shopping center located in the affluent Spring Valley neighborhood of northwest Washington, D.C. It consists of five separate buildings of multi-level retail space. At the time of the sale, the property was 96 percent leased to a number of tenants. It is anchored by Crate & Barrel.
According to PropertyShark.com, Spring Valley Retail Center last changed hands in 2005, for about $15.7 million. The real estate website reports that the property’s current market value is set at approximately $15 million.
“Spring Valley is a well-located shopping center in one of Washington, DC’s most affluent neighborhoods. Acquiring this asset aligns well with our stated retail strategy to purchase high-quality properties in prime locations that demonstrate strong demographics and growing populations as part of our overall efforts to drive shareholder value,” said Paul McDermott, president & CEO of the REIT.
In its third quarter retail research report for the Washington, D.C., area, Marcus & Millichap says retail space demand is on the rise thanks to the new jobs added in the private sector. As retailers expand, they will push net absorption past 2.5 million square feet for a second year and put even more downward pressure on vacancy.
Metrowide, vacancy was 4.8 percent in the second quarter; it is expected to continue its decrease to 4.5 percent. Meanwhile, asking rents will increase. They reached $24.72 per square foot at midyear, and should continue to climb to $25.12 per square foot by the end of the year.
Marcus & Millichap also reports that transaction velocity for multi-tenant assets jumped 40 percent in the past 12 months as more investors entered the market. The aggressive bidding, resulting from the limited inventory and strong demand, pushed up values over the past year, and properties traded at an average price of $360 per square foot, up 44 percent from the low in 2010.
Chart courtesy of Marcus & Millichap.