Capitol Hill Office Trades for $45M

WASHINGTON, DC-A Capitol Hill office has traded for $44.9 million. Municipal Associations sold 500 First St., NW, to Polinger Development Co. Bill Collins, Paul Collins, Drew Flood, Jud Ryan and James Cassidy of Cassidy & Pinkard Colliers represented the seller in the transaction.

The Federal Bureau of Prisons currently occupies the entire 131,141-sf building. While negotiations were going on for the sale, the buyer did not know if GSA would renew the lease or not, Ryan tells GlobeSt.com. If it hadn’t, he says, it wouldn’t have been a significant blow as demand for space in Capitol Hill–a very small enclave in the District–is quite high. “There has been demand, particularly for class A space, by lobbyists and associations to be closer to the Capitol.”

Part of the attraction for the building during the marketing phase was that a buyer would be able to capture some of that demand, he says. According to a GVA Advantis report, the average asking rental rate for available space in Capitol Hill and nearby NoMa was $45.37 per sf at the end of March 2008. Asking rental rates for Class A space average $48.58 per sf and class B space is averaging $40.72 per sf.

Polinger opted to try to keep the GSA as a tenant. Ryan says it will be spending roughly $100 per sf in improvements.