Skanska sells second D.C.-area office building

Our latest Commercial Development sale

We have sold the five-story, nearly 140,000-square-foot office building we developed and built at 1776 Wilson Boulevard in Arlington, Va., for $90 million, a “very strong” financial outcome, said Rob Ward, executive vice president. The sale was highly competitive, with significant interest in the project from major U.S. and European investors, he said.

“It definitely speaks to the quality of this market and continued investor demand and interest in Washington, D.C.,” Ward said.

The buyer is Invesco Advisers. In keeping with Skanska’s business model, the sale money – in part – will be cycled into whatever development projects in either the U.S. or Europe would make the best use of those funds.

Beyond its location – across the Potomac River from D.C. – other factors that made the building highly attractive to potential buyers are that it is 90 percent leased, and that it’s LEED Platinum certified under version 3 of LEED’s Core and Shell rating system, the first office building in Arlington County to attain that status. Skanska is among the tenants, with one of our three D.C.-area offices located there.

We acquired the site in May 2010, and then self-financed the project and built it on a speculative basis, completing construction in November 2012. While it was a bet to start a new office project on spec during a recession, Ward said Skanska believed the outcome would be successful.

“We felt highly confident in the location and the quality of the asset we were going to put there,” he said.

Skanska’s first Commercial Development project in D.C. – and in the U.S. – was 733 10th Street, which we sold in 2012 for $140 million. We currently have five other projects in various stages of development in D.C., including an office building of up to 250,000 square feet on a premier Pennsylvania Avenue site that we just leased from The George Washington University.

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