GI Partners Acquires Defense Portfolio in NoVA for $220M

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GI Partners has acquired a cybersecurity and defense infrastructure portfolio in Northern Virginia for $220 million, on behalf of its Essential Tech + Science Fund. 

The portfolio includes five buildings in four Northern Virginia cities, spanning a combined 860,476 square feet.

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The seller was a joint venture between Turnbridge Equities and Fundamental Advisors LP, which acquired each of the buildings in separate transactions and renewed each of the expiring leases at accretive terms throughout its ownership of the portfolio.

“We executed our business plan of putting together a portfolio with a diverse group of leading defense and cybersecurity contractors and extending every lease that came up for renewal on accretive terms,” Jason Davis, managing director of Turnbridge Equities, told Commercial Observer.

Combined, the properties were 96 percent leased to defense contractors, including Lockheed Martin, Boeing, Northrop Grumman and General Dynamics.

The properties in the portfolio consist of the 205,074-square-foot 460 Herndon Parkway in Herndon; the 84,652-square-foot 14700 Lee Road in Chantilly; the 112,623-square-foot 21700 Atlantic Boulevard in Sterling; the 184,414-square-foot 12450 Fair Lakes Circle in Fairfax; and the 273,713-square foot 10302 & 10304 Eaton Place in Fairfax.

The tenants are all government contractors, according to a statement from John Sheputis, managing director of GI Partners. “The continual operation of these properties during the recent pandemic demonstrates the physical value of this real estate to the U.S.’s national intelligence and defense agencies,” Sheputis stated.

The sellers started creating the portfolio in 2018 to mitigate the rollover risk related to single-tenant occupancy, by creating a multi-tenant portfolio with staggered lease terms and diversified tenancy, according to Cushman & Wakefield, which represented the joint venture in the deal.

“The scope of this transaction reflects the strength of the D.C. market,” said Eric Berkman, vice chairman of Cushman & Wakefield. “In addition, Turnbridge and Fundamental assembled a portfolio of properties that met the specialized infrastructure needs of the region’s growing cybersecurity industry, and capitalized on it.”

Joining Berkman on the deal were the firm’s Shaun Weinberg and Kevin Sidney. The buyer represented itself.

Requests for comment from the parties in the deal were not immediately returned. 

Keith Loria can be reached at Kloria@commercialobserver.com.