156,700-SF Trophy Office Hits the Market

WASHINGTON, DC-The 156,700-sf office tower at 1501 M St. has hit the market, just one year after ownership of the trophy property last changed hands. America’s Capital Partners, which acquired 1501 M St. from New York Life in 2004 for $47.4 million, has tapped real estate services firm Cassidy & Pinkard to find a buyer. According to District real estate records, the property has a current assessed value of approximately $35 million.

Developed in 1991, 1501 M St. sits on a corner parcel in the city’s central business district about five blocks from the White House. The 11-story structure, designed by the architectural firm of Hartman-Cox, also features a three-level underground parking facility and approximately 3,700 sf of ground-level retail, which is fully occupied by a deli.

The property had a 100% occupancy level until recently. Law firm and lobbying concern Manatt, Phelps & Phillips, for one, signed on for space at another location last year. Now the building is 33% occupied, with the Embassy of Sweden serving as the lead tenant in approximately 30,000 sf of space. The US Chess Center Foundation, CBS Broadcasting and real estate firm Residential Rescue Inc. also make their home in the building.

The upside of the low vacancy level, Cassidy & Pinkard brokers note in their executive summary on 1501 M St., is the potential to lease to tenants in an area with high rents and a high demand for space. The average leasing rate for class A space in the central business district, according to Cushman & Wakefield’s Mid-Year 2005 MarketBeat office report, is $45.06 per sf and the vacancy rate is 6.6%.