Epic LLC — a division of the London-based property management company — has paid almost $53m [£32m] for a Washington office block.
The acquisition of the 10-storey building near Farragut Square makes Epic the most recent foreign investor in downtown DC and contradicts an international report which claims the capital is losing its attraction with overseas investors.
“It could be due to the partisan bickering on Capitol Hill or the overall increase in vacant office space, but whatever the cause, foreign investors aren’t as keen on Washington’s real estate market as they once were,” claimed Daniel Sernovitz, a property writer with the Washington Business Journal.
Epic, which has a long-established headquarters in New York, purchased the 105,965sq ft building from Clarion Partners, another real estate investment firm with London connections. The $52.7m sale price to Epic was about $13m [£7.8m] more than Clarion paid for the building back in 2005.
The 919 18th Street NW building underwent extensive renovation during 2013 and has been sold with more than 90 per cent of its space leased to long-term tenants.
Epic is the latest in a string of foreign firms investing in Washington commercial property. The highest profile 2013 sale was the $700m [£42.4m] investment in CityCentreDC an office and hotel complex on the site of the former Washington Convention Center, by the Qatari Investment Authority.
Other sales included the Israeli-based Alony Hetz Properties and Investments’ $330m [£20m] deal with Carr Properties, giving it a near 50 per cent stake in both One Liberty Center and Two Liberty Center.
Of Washington’s $2.6bn [£1.5bn] commercial real estate sales in 2013, more than 58 per cent were driven by foreign capital, according to property managers Jones Lang LaSalle. That’s an improvement on the average of 18.3 per cent and from 30.7 per cent in 2012. At the same time, the overall value of sales dropped from $3.4bn [£2bn] in 2012, JLL reported.
The American capital is still attractive to major global players, but its standing has fallen to fourth among US cities, according to the Association of Foreign Investors in Real Estate.
A survey of its 200 members found that New York held its spot as the top investment market, followed by San Francisco and Houston, which moved up a notch to take third place from Washington DC.
On the international stage, London was named as the most attractive investment city — a ranking it has not achieved since 2009 — beating New York into second place and making the UK capital the only non-US city in the top five.
Among association members, London attracted 24 per cent of the votes, followed by New York at 21 per cent, with San Francisco, Houston and Los Angeles in third to fifth places. Washington DC came in at number 11 after Paris, Munich, Madrid and Tokyo.
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