1101 Connecticut Avenue, NW
Transaction Summary
| Source |
Failed Auction Process |
| Investment Date |
December 2005 (Unrealized) |
| Property Description |
Office |
| Location |
Downtown Washington, DC |
| Property Size |
188,134 SF |
Asset Attributes
|
- Leasehold interest in 12-story office building in prime location at the intersection of Connecticut Avenue and L Streets, NW, in the amenity-rich Golden Triangle area
- Situated directly above the Farragut North Metro Station (red line) and two blocks north of the Farragut West Metro Station (blue and orange lines)
- Building was 85% leased to 28 tenants
- Opportunity seen to reposition asset as a Class A building via active management, minimal renovations of office space and major renovation or change of use of the underperforming food court
- Lack of parking, but mitigated by on-site Metro station and available parking in neighboring projects
|
Value Creation Plan
|
- Lease vacant space and re-tenant spaces with expiring leases
- Building had 15% actual vacancy, with additional 24% expected to roll in first two years, in market that had 5% vacancy overall
- Average in-place rents for office tenants were 20% below market due to asset’s poor image in the market
- Convert food court into more profitable and attractive tenant space
- Subterranean food court had significant vacancy and many tenants in default
- Saw opportunity to meet market demand for boutique health club
- Conversion to this use could increase building’s presence and value
|
Results
|
- 99% leased with staggered expirations
- Office rental rates have been increased to market, with forecast of 28% increase in NOI
- Former food court was converted to state-of-the-art health club tenant
- Health club space conversion created 11,000 square feet of additional rentable space while creating an attractive amenity for the tenants and neighborhood
- Improved existing condition of building exterior by completing façade restoration project
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