This Week's D.C. Deal Sheet: Fairfax Office Building Sells For 19% Gain
In a rarity in today's market, an office property has sold at a higher price than it did two years ago and for more than its assessed value.
Novel Office sold 180K SF Fair Oaks Plaza in Fairfax for $27.8M, property records show.
The Dallas-based firm paid $23.3M for the property at 11350 Random Hills Road in 2022. The property was renovated in 2022, and its value was assessed at $21.8M for this year.
Institutional Property Advisors, a division of Marcus & Millichap, arranged the sale and announced the deal this week. It didn't name the buyer but said it was a private investor “with whom the IPA team has worked with on other transactions.”
Fairfax property records show the buyer was 550 Sunnyside Road LLC.
“The property is 90% leased and has been successful in attracting tenancy from Tysons, Virginia and other surrounding submarkets,” Marcus & Millichap Senior Associate Chandler Pace said in the release. “Despite vacancy in the vicinity, it is anticipated that additional leasing will take place at the property in the coming months.”
Pace, along with Marcus & Millichap’s Bob Filley and Stacey Milam brokered the sale.
LEASES
Crowe, a Chicago-based accounting firm, announced it is moving its downtown D.C. office a few blocks away. The firm is taking 12K SF at Jamestown’s One Metro Center, a 421K SF property that sits next to its namesake station, it announced this week. Crowe is moving from 1455 Pennsylvania Ave. NW. Its lease at One Metro Center takes the property to 89% occupancy, according to the release. Its tenants include law firm White & Case and Universal Service Administrative Company. CBRE represented Jamestown, and Cushman & Wakefield represented Crowe.
SALES
A 123K SF office property was sold to its lender at a foreclosure auction this week. State Farm Life Insurance Co. purchased 1750 H St. NW for $17.6M, the Washington Business Journal reported. Office Properties Income Trust, which owned 50% of the property, had defaulted on its loan. The note had a $32.7M balance and matured in 2027, according to the foreclosure notice.
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BGO’s 1200 New Hampshire Ave. NW was handed to its lender this week through a deed-in-lieu-of-foreclosure transaction. Brookfield Asset Management took control of the 311K SF West End office property after it acquired the loan from Citibank in April. The building, which was constructed in 1979, is home to the District’s inaugural Tatte Bakery & Cafe, which opened in 2020.
MILESTONES
The third and final phase of Ward 7’s Skyland Town Center broke ground this week. WC Smith and Rappaport executives were joined by Mayor Muriel Bowser and Council Member Kenyan McDuffie at a ceremony Thursday to mark the construction start for 126 for-sale townhomes, a 75-unit all-affordable senior housing property, 10K SF of retail and a park. A new brunch concept coming to the development was also announced: Savage Breakfast Club, from native Washingtonian and Ward 8 resident Darrell Gaston.
Skyland Town Center is a decade-long development effort across 18 acres, bringing new residential and retail to Ward 7. Phase 1 included The Crest Apartments, a 263-unit property with 79 affordable units and 84K SF of retail. Phase 2 delivered a retail center anchored by D.C.’s first Lidl grocery store.
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Hoffman & Associates held a grand opening for its 449-unit new apartment building The Westerly near the Waterfront Metro station. Bowser and Council Member Charles Allen joined nonprofit local developer Affordable Homes & Communities to unveil the property, which reserves 30% of its units for affordable housing. Its 136 affordable residences are evenly split between households earning 30% and 50% of the area median income. The development was financed through a combination of market-rate equity and 4% and 9% Low-Income Housing Tax Credits, the release said.
The Westerly boasts 20K SF of amenity spaces, including a rooftop pool deck, a second-floor courtyard with a fire pit and entertainment lounges, a fitness center, and coworking and meeting spaces. Its 29K SF of ground floor retail houses Good Company Doughnut Cafe, GoodVets, AppleTree Public Charter School and a to-be-announced cultural space. Torti Gallas + Partners designed the property.
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Federal Realty announced a renovation of its 228K SF Pan Am Shopping Center in Fairfax. Scheduled to begin work in late June, the REIT is aiming to “refresh and modernize” the 25-acre center, it announced this week. Expected to be finished by the end of the year, upgrades are set to include a fresh paint job, façade upgrades in select locations, a new canopy ceiling and lighting, and the two new trellis features.
Federal Realty acquired the 1979 property in 1993. It is anchored by Safeway, Microcenter and Michaels, and includes retail tenants Glory Days Grill, L’Image Beauty, Starbucks and CVS Pharmacy.
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This week, the Washington Metropolitan Area Transit Authority released a joint development solicitation for a 1.12-acre parcel next to the Deanwood Metro station in Ward 7. The transit authority is looking for a proposal to develop the parcel at 4812 and 4880 Minnesota Ave. NE into a mixed-use residential development. It is the second of five solicitations expected this year, with the other three at the North Bethesda, Brookland and Capitol Heights Metro stations expected this summer. The transit authority’s goal is to have 20 new agreements by 2032. Proposals for the Deanwood opportunity are due September 10. A pre-proposal conference is scheduled for June 28.
