Control of Top-Notch DC Offices Up for Grabs
A majority stake in a Washington office trophy is on the block.
The 386,000-square-foot building, at 1625 Eye Street NW in the Central Business District submarket, is valued at approximately $320 million, or $829/sf. It’s owned by a joint venture between HSBC, Edge Fund Advisors and Brookfield Property Partners.
The offered stake is in the range of 85-95%, with HSBC looking to exit and Edge planning to retain its minority interest. It’s unclear whether Brookfield would sell out or retain a piece. Cushman & Wakefield is the broker.
The property is in a prime location, within a block of Farragut Square and two blocks from the White House. It’s more than 90% occupied, in line with the submarket average for office space. The tenants include law firms O’Melveny & Myers and Kutak Rock, both of which signed leases within the last two years.
The 12-story building, designed by architectural firm Skidmore Owings, opened in 2003 as the headquarters for Union Labor Life. It has a limestone-and-glass facade, a nine-story glass atrium and a 160-foot illuminated tower. The property is designated LEED gold. There is 20,000 sf of street-level retail space that includes restaurant BLT Steak. The building also has a rooftop terrace, a fitness center and a six-level underground garage with 425 spaces.
New York-based Brookfield bought the property from Union Labor in 2003 for $157.5 million. At the end of 2009, Edge, a Washington fund operator, partnered with HSBC to purchase a 90% stake. That transaction valued the building at around $226 million. At the time, it was 97% occupied, but was facing several near-term lease expirations.