DC Tower Could Attract Bids of $200 Million
Another high-end office building is on the block in the red-hot Washington market.
Developer JBG Cos. and fund shop Rockwood Capital are marketing the 294,000-square-foot property at 1101 K Street NW, which could fetch roughly $200 million.
HFF is showing the building, which was completed in 2006. The occupancy rate is 81%, below the 92% average in the East End. The potential of leasing the vacant space should appeal to high-yield investors, who resumed bidding for buildings in the area late last year.
FTI Consulting has a lease on one-third of the building until 2021. Among the nine other tenants are the District of Columbia Bar (52,000 sf) and Bloomberg (31,000 sf).
Financials for the property were unavailable, but asking rents in the East End averaged $52.24/sf at yearend and are projected to rise modestly because the slow pace of construction will limit supply.
The 10-story building is at 11th Street NW, between Mount Vernon Square and Franklin Park. It has a two-story lobby, a rooftop terrace and a fitness center. Upscale restaurant Brasserie Beck is on the ground floor.
JBG, of Chevy Chase, Md., and San Francisco-based Rockwood shopped the property in 2007, almost selling it to BlackRock Realty of New York for about $200 million. But the ensuing credit crisis scuttled the deal, and the duo opted to pull back the listing to focus on leasing. It also lined up a $100 million mortgage from Helaba Bank that comes due next year.
Now appears to be a good time to roll it out once again, given the flurry of activity that has surrounded both core and high-yield office deals in Washington. Investors spent about $1 billion on office acquisitions in the fourth quarter, compared with $1.2 billion for all of 2009, according to Real Estate Alert's Deal Database, which tracks transactions of at least $25 million.