Washington DC Metro Medical Office Building, Northeast Region

Property Description

Washington DC Metro Medical Office Building

Owner is motivated to sell.

The Medical Office Building is priced at $12,000,000.

Fully Leased.

19 Tenants.

Annual increases in rent from 5.00% to 8.00%.

Approx. 40,000 rentable SF.

This property underwent extensive renovation in 2007-2017 including full renovation of common areas and significant upgrades to HVAC, new parking lot, and security integration.

The elevators are undergoing a complete rebuild over the next two months along with the last cosmetic improvements including a new 20’ stainless steal pylon and new kiosk.

All structural elements, systems, and capital improvements on a ten year plus life.

The property was refinanced within the past two years so the appraisal, environmental report, property condition report, and ALTA should only need updates.

The property is 100% leased however one suite tenant has expanded into the neighboring suite and will absorb the existing tenant into their full term lease.

The owner also have a newly signed three year extension with a doctor tenant 200.

Another tenant will be signing a three year extension shortly as a continuation of their existing lease terms. These leases are not reflected on the ARGUS.

Both are not reflected on the ARGUS.

The way the leases were set up is that for new tenants or existing expansion on ten year leases the lease rate on the first two to three years is below market. However they escalations are 5% to 8% per year through the ten year lease terms. As a result the property is not being sold on an existing cap rate basis but on its IRR. Two to three years of IO on the acquisition loan should provide appropriate cash flow.

Also included is a neighboring parcel with site plans, photos and ARGUS priced at $750,000

The land and the building must be purchased together as a package.

The proposed building at this parcel is zoned for 60,000’ of medical office use with one single story parking deck. The FAR can be increased in three ways: (1) by increasing the number of parking decks; (2) by modifying usage to general professional office which allows for a higher parking ratio; (3) by purchasing additional land from the adjacent parcel.

The FAR is based on a cross easement between the two parcels.

Owner believes that the FAR can be increased to above 150,000’ on a maximum use level.

The site will accommodate up to a 25,000 SF slab on grade single story footprint.

The site would be suitable for a credited pad site.

The plans are drawn on the existing zoning and th owner has been working on the design.

$92/sf is for the building with all mechanicals and built out common areas.

The parking deck was not specked pending number of deck levels.

Above a two level deck requires an elevator and fire safety infrastructure so we are taking all configurations including changing the existing parking lot configuration in mind for cost effectiveness.

All utilities are on site as the original plan was for two towers and the second tower infrastructure was in ground.

The owner has not negotiated the price with the local neighborhood commission but has a strong indication that they are willing to negotiate.

A 25,000 SF slab on grade construction will come in significantly less.

Images