Wells Buys $347 Million in Single Tenant Properties From Beacon Capital Partners

Washington Business Journal - December 1, 2003

Beacon Capital Partners sold four offices to completing one of the largest portfolio sales in the D.C. market this year and cutting its local portfolio to one building. Atlanta-based Wells bought two downtown offices, one in Southwest and one in Arlington for a total of 1 million square feet. The sales price was roughly $347 million, say sources in the market.

Beacon, a firm out of Boston, bought all four buildings in 2002 from various owners for about $278.5 million. Each of the buildings has low vacancy, is in a popular location and has long-term leases. The downtown offices, at 1201 and 1225 Eye St. NW, total about 493,000 square feet and are almost entirely leased. General Services Administration is the anchor tenant in both. The Southwest office, at 400 Virginia Ave., is 215,000 square feet and leased to Lockheed Martin. And the Northern Virginia building, at 4250 N. Fairfax Drive in Ballston, is 306,000 square feet with a long-term lease to Qwest.

"Beacon is a savvy real estate investor," Kaye says, "and they're taking advantage of capital market timing." In the past three years, Beacon bought and sold Canal Center Plaza, a four-building campus in Alexandria, and 700 13th St. NW. Beacon's only remaining D.C.-area office is in Georgetown, 2445 M St. NW, which will be filled by the Advisory Board. A company spokesperson says the building is not on the market, but sources say once the Advisory Board moves in and stabilizes the building's vacancy, it likely will be.

Wells (www.wellsref.com) is a national real estate investment management firm that buys existing Class A office and industrial properties, corporate sale-leasebacks and build-to-suit projects. Its investment focus is on well-placed, secure projects. In this market, Wells owns 250 E St. SW. The building, called One Independence Square, totals 337,794 square feet and was purchased from Boston Properties last year. Wells also owns 150,000 square feet of office space at 11109 and 11107 Sunset Hills Road in Reston.

This Beacon sale nearly triples the top sales transaction of 2002, according to Washington Business Journal research.

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