REI-Fronted Retail Building in Tysons Trades for $20M
A building occupied by outdoorsy retailer Recreational Equipment Inc. (REI) has traded hands in Tysons, Va.
Qualified Opportunity Fund LLC has sold 8209 Watson Street, a 32,857-square-foot stand-alone retail building, to an unnamed institutional buyer from Dallas for $20.4 million.
Avison Young represented the seller, who acquired the property in 2018 for $18.5 million, according to property records.
REI Co-op currently occupies the building, and the store serves as one of the Seattle-based company’s top-producing outposts, according to the company. REI’s lease is up in three years, which generally makes potential buyers wary, but REI has options for three five-year extensions, with 12 percent rent increases each time, Avison Young shared.
“With the short-term lease, we were surprised at the level of activity, but it is a true testament to the quality tenant and the dynamics of the Tysons area market,” Jonathan Hipp, a principal with Avison Young, told Commercial Observer. “We had to navigate changing market conditions along the way, but in the end an institutional investor was selected and proved to be an excellent buyer.”
Fairfax County has consistently ranked among the top five wealthiest counties in the nation and has a household income of nearly 2.5 times the U.S. average, according to Avison Young.
With more than 5.5 million square feet of retail space and annual sales of more than $3 billion, Tysons remains the go-to market for high-quality retailers looking to grow and expand in the D.C. market, Hipp said.
Joining Hipp in representing the seller were Richard Murphy and Timothy Farrell in Avison Young’s Washington, D.C., office.
Keith Loria can be reached at Kloria@commercialobserver.com.