Washington Real Estate Investment Trust (REIT) has agreed to buy the Arlington Tower in Virginia, US, for $250m (€207.5m) and has also proposed to sell its 2445 M Street NW office building in the US capital.
The New York Stock Exchange listed company said it will buy the 398,000sqft office building off-market and expects to close in the first quarter of 2018.
The 19-story property at 1300 North 17th Street is situated two blocks from the Rosslyn Metrorail station.
The building was extensively renovated over the past five years with capital improvements of around $16m and is currently leased to tenants.
Washington REIT said it has executed a non-binding letter of intent with an institutional buyer to sell 2445 M Street, NW, its 292,000sqft 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 said it 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.
Paul T. McDermott, the president and chief executive officer of Washington REIT, said: “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.”
“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.”
McDermott added that Washington REIT is catching the market at a relatively low point, and it expects to realize long-term gains as the market becomes more active.