Franklin Tower Brings Forth $88M

WASHINGTON, DC-There seems to be no end in sight to big-ticket office property dispositions in the District, and the recent $87.6 million sale of the 212,000-sf Franklin Tower has added to the city's growing collection of high-priced sales. WestWind Capital Partners LP acquired the office property from the Bernstein Cos. and Gingery Development at a cost of about $413 per sf. Part of the acquisition deal included the assumption of Franklin Tower's $30 million debt, or payment of the prepayment premium on the debt. "There was a lot of competition for the property," Cassidy & Pinkard assistant vice president Drew Flood tells Cassidy & Pinkard represented the sellers in the deal, while WestWind, Flood notes, represented itself.

Franklin Tower occupies a coveted half-acre corner spot at 1401 Eye St. in the city's prominent East End area. Developed in 1991, the 12-story tower sits on Franklin Square Park and is flanked by the historic Franklin School and Almas Temple. In addition to its approximately 200,000 sf of class A office offerings, the property also features 10,000 sf of ground-level retail space, a 2,000-sf fitness center, and a three-level subterranean parking facility. Space in the building, currently leased to 98% capacity, goes for about $32 per sf, according to Woodmark Real Estate Services, which had been handling leasing activities at the property. Flood says a decision about the leasing agent under the new owner has not yet been made. Franklin Tower is home to a sterling list of nearly 20 tenants, including Anheuser-Busch Cos. Inc., ChevronTexaco, Mastercard International Inc., Microsoft Corp., Shell Oil Co., United Technologies Corp., and Vivendi Universal Holding I Corp.

In addition to its desirable locale and strong tenant base, the property is also enhanced by several fairly long-term occupancy agreements, including those of the four tenants who occupy over half of the building. The Alliance of Automobile Manufacturers' 18,500-sf lease is not scheduled to expire until 2013, and SBC Management Services Inc.'s two leases totaling about 37,000 sf will note come up for renewal until 2008. Law firm Womble Carlyle Sandridge & Rice PLLC's 37,000-sf lease and United Technology Corp.'s 18,500-sf lease will not come up for renewal until 2011.

Source: GlobeSt
Author: Barbra Murray