Hines Global Picks Up Trophy Office in DC’s Capitol Riverfront
Hines Global Income Trust has acquired 1015 Half Street, a 396,000-square-foot, trophy office asset in Washington, D.C.’s Capitol Riverfront.
Neither the price nor seller was disclosed; however, public records show that Opus East and Prudential Real Estate Investors (now known as PGIM Real Estate) developed the Class A, LEED Gold-certified building in 2011, and it was assessed at $158 million last year.
The building, located at 1015 Half Street SE between K and L streets, consists of 373,000 square feet of office space and an additional 17,300 square feet of ground-floor retail. Rent in the building averages approximately $55 per square foot, according to Cushman & Wakefield.
“We are strong believers in the allure of Washington, D.C., as an institutional market, and the acquisition of 1015 Half Street allows us to bring the combination of market liquidity and future growth to our investors,” Alfonso Munk, Hines Global Income Trust’s president and chief investment officer, said in prepared remarks. “This investment aligns with Hines’ conviction that high-quality office product will outperform the market and provide tenants with a dynamic working environment.”
The property is currently 96 percent leased, with a tenant roster predominantly of U.S. and District of Columbia government organizations.
1015 Half Street is close to the Washington Nationals‘ baseball stadium, Nationals Park, and just one block from the metro. It’s also near the Capitol and federal government districts, Reagan National Airport and Amazon’s HQ2.
According to Hines’ recent data, the Capitol Riverfront has seen its population nearly double in the past decade and continues to attract a younger demographic. The area is poised to see nearly 15,000 residential units and 1 million square feet of new retail by 2022.
“The Capitol Riverfront submarket has the lowest vacancy rate in the District at 7.9 percent, well below the metro-wide average of 14.5 percent,” Chuck Watters, Hines’ senior managing director, said. “This asset provides an opportunity to invest in the path of growth, with this submarket poised to outperform the broader metro area.”
Geer LeBoutillier and Hasani Hayden of Hines’ Washington, D.C., office, along with Omar Thowfeek, Kimberly Magness and Aaron Mader of Hines Global handled the sale.