DivcoWest Properties has acquired an office building in Washington, DC for $100m (€85.1m) – its first commingled fund investment in the US capital’s office market, according to sources with direct knowledge of the transaction.
The seller of the building, located at 1133 15th Street Northwest, was a local family office investor. DivcoWest declined to comment.
The asset has 212,658sqft of space, and it is understood that DivcoWest would have an opportunity to add some value to the property.
The property is currently 89% occupied, with one of the tenants being the start-up incubator firm 1776.
The building is centrally located, and is close to several transit stations and surrounded by retail, apartments and several hotels.
DivcoWest used capital from its DivcoWest Fund V to complete the transaction, a fund for which $1.585bn of capital was raised earlier this year.
The fund’s targeted return will be in the range of 10-13%, and its leverage is projected to be 65% or less.
Fund V targets markets including the San Francisco Bay Area, Seattle, Boston, New York City and Austin.
DivcoWest focuses on acquiring existing assets and making improvements through re-leasing and redevelopment, and by buying new development opportunities.
The fund manager looks to invest in a mixture of office and research and development assets, favouring properties in areas with strong education facilities, employment growth, amenities and transportation systems with high barriers to entry.