Real Capital, Silverline Equities Buy NoVA Office Complex at Discount

A distressed office complex in Northern Virginia has traded hands for a significant discount compared to its sale price from 20 years ago.

Colorado-based Real Capital Solutions (RCS) and Falls Church, Va.-based Silverline Equities paid $57.1 million for Tysons Pointe, a two-building, 373,617-square-foot campus in Tysons, Va. That’s about 41 percent less than the $97.5 million that the campus sold for in 2005.

RCS and Silverline acquired the two office buildings via a receivership sale. Boston-based investment firm Rockpoint had purchased the asset for $90 million in 2017 before it eventually fell into distress. The owner ultimately handed the keys to the lender, U.S. Bank, according to the Business Journals. Further details about any delinquencies were not immediately available. Representatives for RCS and for U.S Bank did not immediately respond to a request for more information. 

“Tysons Pointe represents a rare opportunity to acquire a pair of high-quality, amenitized office assets in one of the D.C. region’s most dynamic and resilient submarkets,” Marcel Arsenault, RCS Chairman and CEO, said in a statement. 

The two buildings at Tysons Pointe are about 75 percent leased to 28 tenants, per RCS. Tenants at 8300 Greensboro Drive, a 12-story, 277,466-square-foot property, include Bank of America and Yoko Consulting. Tenants at 1600 International Drive, a four-story, 96,151-square-foot building, include software company Red Hat, and IT solutions firm DMI. The complex is located across the street from The Boro, The Meridian Group’s $850 million, mixed-use project. 

RCS has a history of acquiring office properties at discounted rates during times of distress and economic uncertainty. With billions of dollars of outstanding debt set to come due over the next few years, Arsenault indicated that his firm is primed to take advantage. 

“This investment is only the beginning of a looming debt contraction that is unfolding across the country,” Arsenault said in a statement. “We’re at the leading edge of a multi-year debt and value reset in the office sector, with distressed assets beginning to surface. We estimate that of the roughly $750 billion of outstanding office debt, $150 billion is likely to be written down over the next three years. The wave of distressed offices is in the early innings.

“The current national office opportunity is enormous and represents our third rodeo. We acquired distressed offices during the S&L Era and the Global Financial Crisis. However, buying office properties in today’s distressed market requires considerable expertise to win the leasing wars. … Our company is targeting $1-$2 billion of high-quality office acquisitions over the next 2-3 years.”

Nick Trombola can be reached at ntrombola@commercialobserver.com.