WRIT Snaps Up Two Fully Leased Office Buildings near Quantico Marine Base for $68M
- Jun 04, 2010
June 4, 2010
By Barbra Murray, Contributing Editor
Two office buildings recently completed at the 85-acre Quantico Corporate Center development in Stafford, Va., have just come under the ownership of Washington Real Estate Investment Trust (WRIT), courtesy of a $68 million transaction. The Rockville, Md.-headquartered REIT acquired the fully leased assets, encompassing an aggregate 271,000 square feet of Class A space, from the developer of the business park, Fredericksburg, Va.-based Silver Cos.
Real estate values are still at a low point, so the price tag for the buildings was not as hefty as it would have been had they reached completion three years ago. It’s a buyers’ market. “An 8.8 percent cash return is certainly very good for us,” said William T. Camp, Executive Vice President and CEO of WRIT, speaking to CPE about the acquisition. “The pricing is in the middle for similar buildings that were sold in the past year in the Washington, D.C., area, but it’s a better return than some of the other buildings we’ve looked at.”
Carrying the addresses of 925 and 1000 Corporate Drive, the two four-story office structures are home to a total of 14 tenants, including BAE Systems, General Dynamics, and MITRE Corporation. Silver Cos.’ ability to secure large pre-lease deals for the buildings came as no surprise–given their location. Quantico Corporate Center, which will ultimately feature approximately one million square feet of commercial mixed-use space, sits just a stone’s throw from Marine Corps Base Quantico, a longtime magnet for government contractors. And over the last few years, the base has become an even bigger draw because, due to the U.S. Department of Defense’s 2005 Base Realignment and Closure process, five military department investigative agencies will co-locate at Quantico by September 2011.
“We truly anticipate that BRAC activity at the base, and in my view, the increased importance the Marines play in the overall operation of the military, will increase demand,” Camp said. The 719,000-square-foot Military Department Investigative Agencies facility, presently in the construction phase about one mile from the base, will also bolster demand.
WRIT is well aware of the value of having a presence near Quantico, and the REIT hopes to expand its portfolio in the area. There are still buildings to be built at Quantico Corporate Center. “The developer is trying to pre-lease the third building for that site,” Camp noted. “We don’t have an agreement for us to acquire it, but since we bought the first two, we have a good relationship with the developer and we hope we will be involved in a future transaction.”