JP Morgan Pitches Trophy DC Office Building
J.P. Morgan Asset Management is marketing the trophy office building at 1501 K Street NW in Washington.
The 402,000-square-foot Investment Building is expected to attract bids of about $415 million, or $1,032/sf. Cushman & Wakefield began the marketing campaign last week.
The Beaux Arts property dates back to 1923. In 2001, it underwent a massive renovation that preserved its historic limestone facade, upgraded the office space and added two more floors of offices, increasing the building’s size to 12 floors. Three underground parking levels were also added.
The occupancy rate is 92%, exceeding the 88% average in the surrounding Central Business District submarket. Law firm Sidley Austin occupies 72% of the space under a lease that runs until 2031. UBS occupies the top two floors, or 13% of the space, under a lease that expires in 2026. Its rent is some $10/sf below the market asking rate. Overall, the average weighted remaining lease term is 12 years.
There is about 18,000 sf of street-level retail space leased to several restaurants. The building’s amenities include a concierge, a fitness center and a newly renovated roof deck. The garage includes bike racks.
The building is 550 yards north of the White House in a prime spot along K Street, which is known for its concentration of lobbying and law firms. The area is also dense with shops, restaurants and hotels.
J.P. Morgan acquired a 95% interest in the property in 2006 for $273.6 million and later acquired the remaining stake.
This is the third trophy building within blocks of the White House to go up for sale in recent weeks. A JBG Smith partnership is marketing the 612,000-sf Warner Building, at 1299 Pennsylvania Avenue NW. It’s valued at roughly $400 million, or $654/sf. While the property is almost fully leased, the pending departure of a tenant would drop the occupancy rate to 71% in 2020. Eastdil Secured has that listing.
Meanwhile, TIAA unit TH Real Estate is shopping the 780,000-sf trophy building at 1001 Pennsylvania Avenue NW. It’s valued at roughly $750 million, or $962/sf. HFF is the broker.