Washington REIT (Washington Real Estate Investment Trust – NYSE: WRE) is kicking off the new year with the announcement of an agreement to acquire an iconic Rosslyn, VA office building.
The company is under contract to acquire Arlington Tower, a 398,000 square foot Class A office building in the heart of the rapidly developing Rosslyn submarket of Arlington, VA for $250 million. Washington REIT is acquiring the asset off-market and expects to close in the first quarter of 2018.
This 19-story property at 1300 North 17th Street is situated just two blocks from the Rosslyn Metrorail station, where the Blue, Orange, and Silver lines provide quick access to Ronald Reagan Washington National Airport, the Pentagon, and the entire national capital area.
With a distinctive reflective glass facade, Arlington Tower is one of Rosslyn’s most recognizable landmarks. Due to the asset’s irreplaceable physical location and height, the building provides unparalleled views not only from its expansive rooftop terrace, but from many of its upper- and mid-floor office suites. Tenants enjoy vistas across the Potomac River to the capital city’s monuments, as well as surrounding areas.
The building was extensively renovated over the past five years with capital improvements of approximately $16 million and is currently leased to prestigious tenants including B. Riley FBR, Raytheon/BBN Technologies, Promontory Interfinancial Network, Pepco, the National Electrical Manufacturers Association, and Graham Holdings Company, which sold The Washington Post and other assets to Amazon founder Jeff Bezos in 2013.
As the result of a recently completed renovation, the building offers tenants a private rooftop deck with sweeping monument and water views, state-of-the-art fitness center with lockers, showers, and towel service, destination dispatch elevators, updated onsite retail amenities, and a landscaped outdoor plaza. The capital improvement package also transformed the main lobby and five-level underground parking.
Washington REIT plans to create plug-and-play office suites that are ready for tenants to move in quickly. These pre-built spec suite options will offer small and mid-size tenants access to the views and amenities of a new office building on very flexible terms.
On the heels of this anticipated acquisition, Washington REIT has executed a non-binding Letter of Intent with an institutional buyer to sell 2445 M Street, NW, its 292,000 square foot DC office building where the sole tenant, the Advisory Board Company, is expected to vacate on May 31, 2019. The proposed sale of 2445 M Street is subject to negotiation and execution of definitive transaction documents and the satisfaction of all closing conditions set forth in such definitive transaction documents.
Washington REIT expects to announce the anticipated proceeds and closing date for this sale after it has entered into a contract with the buyer. In addition, Washington REIT has entered into a definitive agreement with respect to the previously announced sale of Braddock Metro Center and now expects to complete this transaction later this month, subject to the satisfaction of customary closing conditions.
“Selling Braddock Metro Center and 2445 M Street, NW and acquiring Arlington Tower represents a great opportunity for Washington REIT to upgrade our portfolio with a well-occupied asset at a price that is below replacement cost,” said Paul T. McDermott, President and Chief Executive Officer of Washington REIT. “Our research shows that Rosslyn is at an inflection point, with rising rents and declining vacancy as it transitions from a 9-to-5 office environment into a 24-hour urban destination with the demographics, amenities, and infrastructure to attract top-tier corporations. We are catching the market at a relatively low point, and we expect to realize long-term gains as the market becomes more active. In fact, we think that now is the time to buy in Rosslyn.”
“Washington REIT can now offer tenants several options with dramatic river and monument views at different price points: Watergate 600, Arlington Tower, and 1600 Wilson,” said Anthony Chang, Vice President, Asset Management.
Washington REIT is a self-administered, equity real estate investment trust investing in income-producing properties in the greater Washington metro region. Washington REIT owns a diversified portfolio of 49 properties, totaling approximately 6.3 million square feet of commercial space and 4,268 multifamily units, and land held for development. These 49 properties consist of 20 office properties, 16 retail centers and 13 multifamily properties. Washington REIT shares are publicly traded on the New York Stock Exchange (NYSE:WRE). For more information, please visit www.washreit.com.