Washington, D.C. Investment Sales Activity Up nearly 300 percent


Second quarter 2010 sales activity in the Washington DC region grew 295 percent over the first quarter, according to LoopNet, with investors spending more than $1.35 billion for area assets from April to June. In the first quarter, LoopNet quantified less than $344 million invested into local assets.

This second quarter increase squared up the 12 months ended June 2010 with the previous 12 months. Commercial property sales in Washington DC were about $2.7 billion for the four quarters between Q3 2009 and Q2 2010, almost the exact same as they were the twelve months lagging June 2009.

LoopNet also reports that multifamily assets have seen a price-per-unit increase of 70 percent over the past year. Retail and industrial asset prices grew three percent and 11 percent, respectively, while office prices per square foot actually showed a decline of six percent.

With reports of assets going on the market at $900 per square foot, and with year-long-holds rewarding property owners with a 200 basis point cap rate compression, it’s unlikely this decline will continue.

MULTIFAMILY

Significant multifamily assets that were traded in the second quarter included:

– 425 Massachusetts Ave NW, which traded for $166.9 million, or $299,000/unit;
– The Residences at Park Hyatt, which traded for $22.75 million, or $80,000/unit

The 32-unit 6000 13th Place, NW and the 28-Unit 1020 Monroe St NW each traded at $3.2 million in the second quarter, while the 37-Unit 2517 Mozart Place NW traded at $3.3 million.

OFFICE

The investment world seemed to stand up and take notice last August, when 1999 K Street NW sold for $207.9 million, or $835 psf, a transaction followed shortly by 1099 New York Ave, NW selling for $90.5 million ($508 PSF) and 1625 Eye St selling for $226 million ($585 PSF).

But with the turn of the calendar year, it seemed major deals accelerated.

In the second quarter alone:

– 1350 Eye St NW sold for $209.2 million, or $574 psf;
– Washington Harbour sold for $243 million, or $457 psf, at a 6.5 cap;
– Two Constitution Square, (145 N St NE) sold for $305 million, or $518 psf, at a 6.2 cap;
– The Evening Star Building at 1101 Pennsylvania Ave NW sold for $180 million, or $798 psf, at a 5.3 cap; and
– 500 1st St NW sold for $68 million, or $519 psf, at a 7.5 cap.

All but one of these deals, the 1350 Eye St. transaction, took place in June. The 1350 Eye St. transaction took place at the end of May.
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One Response to Washington, D.C. Investment Sales Activity Up nearly 300 percent

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