Wells Real Estate Investment Trust II has agreed to buy the 679,710 sq. ft. Market Square office complex in downtown Washington, D.C. for approximately $615 million, excluding closing costs. The transaction is expected to close on or before March 10.
Eastdil Secured represented the seller, Avenue Associates Limited Partnership, an affiliate of Beacon Capital Partners LLC. Heather Griner of Wells Real Estate Funds represented the purchaser. The $75 million in earnest money Wells has paid will be applied to the purchase price at closing, according to a filing with the Securities and Exchange Commission.
The Class-A property, which includes two 13-story office buildings, is located on Pennsylvania Avenue between the U.S. Capitol and the White House. Built in 1990, the buildings offer panoramic views of many of the city’s national monuments. The property is certified LEED silver and is home to the United States Navy Memorial.
“We are very proud to add Market Square as a new centerpiece in Wells REIT II’s impressive national office portfolio,” stated Nelson Mills, president of Wells REIT II, in a prepared statement. “This is an outstanding property whose premier location, enduring architecturaland highly rated tenant roster exemplify the qualities that we seek for our investors’ portfolio."
Market Square is the Washington D.C. headquarters of leading global law firms that include Fulbright & Jaworski, Shearman and Sterling, and Mintz Levin. Fortune 500 companies on the tenant roster include Procter & Gamble, Novartis, AstraZeneca, Bayer Corp., Florida Power & Light, and Waste Management.
Other prominent tenants include Edison Electric Institute, the association of shareholder–owned electric companies in the United States, and health insurer United Healthcare.
Fred Seigel, president and COO of Avenue Associates Limited Partnership, said theunderscores the high demand for quality properties. “This was an extremely competitive process with strong interest from around the globe. It resulted in a very good outcome for Beacon's investors and for Wells REIT II, which has acquired a timeless asset in one of the strongest markets worldwide. This is truly an irreplaceable property."
The portfolio of Wells REIT II currently includes 92 office buildings in 24 states and Washington, D.C., covering more than 22 million sq. ft.