Rockpoint Sells Two More NoVA Office Complexes at Major Discounts

Something is spooking Rockpoint Group out of its office assets in Northern Virginia. 

Over the past seven months, the Boston-based private equity firm has sold or handed over multiple complexes west of the Potomac River for massive discounts. The two most recent sales came in quick succession: the 10-story, two-building Tysons International Plaza and the three-building Tysons Dulles Plaza, both in Tysons, Va. 

Both properties were sold for roughly one-third of what the firm paid to acquire them in 2017. Rockpoint traded Tysons International Plaza, at 1919-1921 Gallows Road, to an affiliate of Fortress Investment Group for $54 million, according to the Business Journals, which first reported the news. That’s 60 percent less than the $136 million Rockpoint paid for the plaza eight years ago. 

Built in 1987, the plaza spans roughly 454,000 square feet. The building is about 60 percent leased to tenants that include VWG Wealth Management, standardized test provider PSI and plastic surgery clinic Airsculpt, per the Business Journals. Rockpoint renovated the towers in 2020, though it’s unclear how much it spent on the upgrades. 

Rockpoint meanwhile also recently sold Tysons Dulles Plaza, at 1410-1430 Spring Hill Road, to JBG Smith for $42.3 million. That’s nearly 68 percent less than the $130.5 million Rockpoint paid for the complex in 2017. 

Bethesda,Md.-based JBG Smith has lately focused its office attention on National Landing, its 17 million-square-foot, master-planned development in Crystal City and Pentagon City, Va. Yet the firm said it plans to redevelop one of the buildings at Tysons Dulles Plaza into residential use, while also modernizing the office components. 

“Notwithstanding regional economic headwinds and the negative impact of remote work on the office sector, we see distress leading to extremely attractive office investment opportunities for the first time in more than a decade,” George Xanders, JBG Smith chief investment officer, said in a statement. “We are actively exploring additional office investments, similar to Tysons Dulles Plaza, especially where we can apply our proven mixed-used redevelopment expertise.”

Office occupancy at the roughly 500,000-square-foot Tysons Dulles Plaza was not immediately clear. Tenants include Nova Institute, National Spine & Pain Centers and restaurant American Prime. 

Representatives for Rockpoint and Fortress did not immediately respond to requests for comment. 

The two sales just scratch the surface of issues facing Rockpoint office exposure. Earlier this month, Real Capital Solutions and partner Silverline Equities paid $57.1 million for Tysons Pointe, a two-building, 374,000-square-foot complex less than a mile north of Tysons Dulles Plaza. Rockpoint purchased the complex in 2017 for $90 million, though it recently handed the keys back to lender U.S. Bank due to financial distress. 

In January, Finmarc Management spent $51 million for Dulles Corner, a four-building, 620,000-square-foot campus just east of Dulles International Airport. Rockpoint paid $141 million for the campus in late 2018, meaning that Finmarc’s deal represented a 64 percent haircut. 

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