Lowe Buys 12-Story Building From LaSalle

WASHINGTON, DC-Lowe Enterprises Investment Management has acquired a 12-story building at 1101 Connecticut Ave. NW on behalf of an unidentified pension fund client.The all-cash price was about $26 million, or $150 per sf for the 175,000-sf building.

Located at the corner of Connecticut Avenue and L Street, the site lies in the heart of the commercial business district on top of a Metro station. Several retail tenants, including a food court, occupy the ground floor to serve the busy pedestrian traffic.

“The quality of the location provides a lot of downside protection,” says Jim Darcey, senior acquisition officer for Lowe’s DC office. “The presence of food court represents the value-add opportunity over the long term. We have long-term upgrade strategies in mind but nothing definite,” Darcey says. The deal underlines how Washington remains attractive to real estate investors.

“The long-term fundamentals are as strong as ever. The investment environment is affected by the overall allocation of pension funds, which has slowed down some of the ferocious bidding wars. There’s still plenty of capital interest in DC,” Darcey says.

Built in 1978 and last renovated in 1993, the building has rents that average in the high $20 per sf range in a market where rents are averaging $40 per sf or better.

The building is currently 97% leased to corporations, professional service firms, associations and lobbyists.

The seller was Endowment Realty Investors Inc., an affiliate of LaSalle Partners, which was represented by Holliday Fenoglio Fowler LP.