Commercial Real Estate Direct Staff Report
A venture of MRP Realty and the Rockpoint Group is offering for sale 1310 North Courthouse Road, a 380,752-square-foot office building in Arlington, Va.
It has hired Eastdil Secured to market the 11-story building, which is expected to sell for roughly $145 million, or about $380/sf. That would result in a capitalization rate in the high 7-percent to low 8-percent range.
The 32-year-old property, a former headquarters for Bell Atlantic, is roughly 96 percent leased. The MRP/Rockpoint venture bought it in 2006 for $115 million. It invested another $12 million on renovations and $22 million on tenant improvements.
Its price reflects the fact that its largest tenant, the FDIC, will be leaving its space. The agency occupies 71,027 sf under a lease that matures in October 2015 and 45,747 sf under a lease with a 2020 maturity. It pays an average of $43.16/sf. That's more than the $39/sf average for office space in the Rosslyn-Courthouse corridor, where 1310 North Courthouse sits. So, the thinking is that the FDIC's space will be re-leased at lower rates.
When the agency moves out, the building will be 35 percent vacant. That compares with the area's 19.6 percent vacancy rate, according to Reis Inc.
The FDIC is moving to 3701 North Fairfax Drive, which is owned by the Morris & Gwendolyn Cafritz Foundation.
Other tenants at 1310 North Courthouse include conservation organization Rare and the Federal Motor Carrier Safety Administration. The property includes a parking garage with 661 spaces.
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