950 L'Enfant Plaza Fetches $55 Mil in Speedy Sale

WASHINGTON, DC-The 263,694-sf office tower at 950 L’Enfant Plaza here has been acquired by Heyman Properties for $55 million. The seller, VIB, a Dutch fund, paid cash.

New York-based Greenwich Group International, which represented the seller out of the brokerage firm’s DC offices, completed the deal within a three-month marketing window mandated by VIB.

The building is entirely net-leased to the US Department of Energy, the Internal Revenue Service and the Holocaust Museum offices. The co-terminous, 10-year leases expire in less than six years, a factor of the deal that DC-based Greenwich managing director Larry Baucom, who brokered the sale, says points to the growing viability of net leases, even on properties in which the lease–in this case three leases to US-government tenants–have less than 10 years to run.

“This indicates that there is a strong market for net-leased properties. Historically, net lease deals were much more difficult unless you had 15 years before expiration,” Baucom tells GlobeSt.com. “There is a strong demand for credit tenant leases even if the terms are under 10 years.”

Bidding on the property was aggressive, “with a wide range of interest, both international and domestic,” Baucom says. “We did have incredible investor response even though entire the project was subject to leases that would expire in six years. Usually that is a much more difficult factor to handle.” He added that while there were several viable candidates, Heyman walked in the door with everything the seller was looking for. “They were an all-cash buyer and could close in a very short time frame,” he says. “In addition, they were a very credible with substantial resources.”

According to Baucom, the L’Enfant transaction represents the last property that VIB will be selling in the US.