Brookfield Asset Management has secured $443.1 million in debt originated by JPMorgan Chase and Wells Fargo to acquire seven office properties and the ground lease for another in the Washington, D.C., region from WashREIT, according to Kroll Bond Rating Agency (KBRA) data.
JPMorgan provided just over $288 million of the loan proceeds, while Wells Fargo covered the remaining funds, which amounted to nearly $155.1 million, according to KBRA.
The two-year, interest-only loan, along with $150.5 million in equity from Brookfield, allowed the mammoth investment manager to acquire fee simple interests in seven D.C.-area office properties and a 99-year ground lease associated with the eighth asset 2000 M Street NW in D.C. which expires in 2070.
D.C.-based WashREIT has been wrapped up in a campaign to transition to a pure-play, multifamily real estate investment trust in the wake of the depths of the coronavirus pandemic. In June, the REIT announced that it had plans to offload the bulk of its office and retail holdings for nearly $1 billion across two separate transactions.
According to KBRA, the eight properties securing Brookfield’s CMBS acquisition loan include the 394,141 Sq Ft. Arlington Tower in Arlington, Va., which captured more than a third of the loan balance ($164.8 million); the 191,219 Sq Ft. office at 1775 Eye Street NW in D.C.; the 108,216-square-foot Army Navy Building at 1627 Eye Street NW in D.C.; the 150,186 Sq Ft. Fairgate at Ballston at 1005 North Glebe Road in Arlington; 1600 Wilson Boulevard, a 171,863 Sq Ft office in Arlington; the 104,388 Sq Ft. 1220 19th Street NW in D.C.; and the 120,178-square-foot Courthouse Square office in Alexandria, Va. The ground lease at 2000 M Street rounded out the eight-property bundle.
The eight buildings were built between 1912 and 1988, and five of the eight had been renovated between 2014 and 2020, per KBRA. Brookfield secured a $30 million leasing and capital expenditure letter of credit from Bank of America to cover future upgrades to the portfolio.