JBG Smith Offloads Another D.C. Office Building For $110M
JBG Smith, the REIT behind Amazon HQ2 and the surrounding National Landing neighborhood, has sold a downtown office building as it continues to reduce its holdings in the District.
The REIT sold 2101 L St. NW, a 375K SF building near Washington Circle, to BG Ventures for $110M, according to D.C. deed records filed on Friday afternoon.
ELV Associates is the company’s capital partner, BG Ventures co-founder Neal Gumbin told Bisnow Friday, but he didn't disclose the breakdown of the partnership.
Northwestern Mutual Life Insurance Co. was JBG’s lender and is also BG Ventures’ lender, Gumbin said. A trust document filed in deeds records Friday shows a $70M loan from Northwestern Mutual to BG Ventures.
“We think this is a great opportunity to buy a terrific building at a great location at a really good price,” Gumbin said.
JBG Smith declined to comment.
The property was built in the 1970s and renovated in 2007. It was part of the Vornado D.C. portfolio that merged with The JBG Cos. acquired in 2017 to become the REIT JBG Smith.
JBG’s $121M loan on the property matured in mid-November, according to its third-quarter investor materials, which show the building was 75% leased. Its tenants include commercial real estate giant Cushman & Wakefield.
“We need to do some leasing there,” Gumbin said.
Last quarter, the REIT wrote down the value of 2101 L St. NW along with two other properties, the Washington Business Journal first reported.
The L Street property was one of the REIT’s last office properties left in the District. It also owns just over half of a 210K SF office building at 1101 17th St. NW.
It lost four L’Enfant Plaza buildings totaling more than 887K SF in October, when its lender, Blackstone, purchased the properties at a foreclosure auction. Similarly, JPMorgan Chase took over its 256K SF Georgetown office building, The Foundry, earlier this year.
In September, JBG Smith sold a 345-unit Fort Totten apartment building that it developed in 2015 for $87M.
BG Ventures’ Gumbin told Bisnow the company “would love to do more” acquisitions in the area.
“We think it’s a great buying opportunity,” he said of the office market.
BG Ventures has offices in D.C. and Phoenix and owns properties across asset classes near those regions. In the D.C. metro, BG owns a number of life sciences properties, including the 283K SF Key West Life Science Center in Rockville and the 135K SF West Diamond Medical Office in Gaithersburg, according to its website.
Boston-based ELV operates in New England, the Mid-Atlantic and the Southeast. As of the end of last year, the firm had invested $3.7B in acquisition and development since its inception in 1990.
