Normandy Acquires $157M Portfolio

NORTHERN VIRGINIA-Normandy Real Estate Partners was the winning bidder of the US Army/Air Force Mutual Aid Association’s real estate portfolio here, called Starco Properties. The Morristown, NJ-based firm paid $157 million for the 10-asset portfolio, which totals 786,632 sf. It made the acquisition on behalf of its private equity fund, Normandy Real Estate Fund, LP, which is co-sponsored by an affiliated partnership, Normandy Northeast Office Venture Partners, LP.

The properties are located in Northern Virginia submarkets of Westfields, Reston, Fairfax, and Alexandria. There is also one asset located in Columbia, MD.

Cassidy & Pinkard represented the association, which provides life insurance to the military. Holland & Knight was tapped to serve as legal counsel to Normandy. Morgan Stanley provided the mortgage financing.

“This transaction represents an exceptionally high quality, value added portfolio of assets in the fast growing Metropolitan Washington, DC market, an investment market our firm has targeted for significant expansion going forward,” Gavin Evans, principal of Normandy, says in a statement.

In the portfolio are two buildings under construction at Westfields that will deliver by the end of Q1 2007, he adds.

These buildings Stoneleigh I and II are 105,833 sf each. One is already fully leased to Lockheed Martin, according to Tonya Ginter, director of research for GVA Advantis. The other, she tells GlobeSt.com, is still completely vacant.

Many of the properties in the Starco portfolio are located along Route 28 south, Ginter notes. “Vacancy rates are very high in that market because there has been so much construction coupled with little leasing activity. More and more owners are selling buildings in this environment.”

Most of the Starco properties are fully leased. Glenview I, II, III and IV, for instance, are all fully leased, Ginter says. The Reston office building, 1775 Wiehle Ave., is fully leased as is the building in Fairfax City, a class B asset located at 4031 University Dr.. The 90,000-sf building in Alexandria is only 52.8% leased.