A Greenbelt property that houses a federal satellite program has sold for $6.4 million.
Diversified Realty Ventures of Bethesda announced it bought the 120,000-square-foot office building next to NASA Goddard Space Flight Center. The secured property, Greentec IV, at 7700 Hubble Drive, traded for $6.4 million, according to Prince George’s County records.
The building is fully occupied by government employees and contractors working on the Joint Polar Satellite System. This system is a joint mission of NASA, the National Oceanic and Atmospheric Administration, and the Department of Defense. Government contractor Trax International has leased Greentec IV on behalf of the satellite program.
Diversified’s acquisition is subject to a ground lease that runs through 2075 with possible extensions.
The deal demonstrated that having a federal tenant can sometimes pose a challenge to marketing office space, as investing in Greentec IV was complicated by a number of factors, Diversified principal Drew Liffman said in a statement.
“At the outset, this investment seemed to pose a lot of risk with its ground lease, single tenancy, 27 percent vacancy in the Greenbelt submarket, and the possibility of federal government budget-cutting that could affect [the satellite program] and its mission,” Liffman said. “When the building went to market, [the satellite program] was facing funding uncertainty at a critical point in its life cycle due to the congressional budget deadlock. All of these factors made the asset difficult to underwrite, and undoubtedly caused many buyers to pass on it.”
But Greentec IV is a long-term investment, Liffman added, noting that even when the satellite program’s mission is complete, “the building is well-positioned to attract new tenants. While the Greenbelt office market as a whole still has a long way to go toward full economic recovery, this building’s specialized infrastructure and close proximity to Goddard — which is space-constrained by its master plan — provide significant competitive advantages.”
Greentec IV is the second asset that DRV has acquired from C-III; last fall, DRV acquired Circuit City’s former headquarters building, Deep Run III, in suburban Richmond, Va., for $12.4 million. Vacated by Circuit City following the company’s bankruptcy, the building is now being renovated and re-leased as part of a $25 million repositioning strategy.
The satellite program at Greentec IV is the next-generation multi-functional satellite system intended to replace today’s long-range weather satellites. In addition to weather monitoring and forecasting, the system is to have advanced research and military capabilities. The first satellite is expected to be launched in 2017.
Built in 1994 as two low-rise structures linked by a common lobby, Greentec IV is just off the Capital Beltway and I-295, a few minutes to the MARC commuter rail line. Virtually next door, the 1,100-acre Goddard Space Flight Center houses more than 10,000 employees, with thousands more working for government contractors nearby. Douglas Development has purchased the land parcels surrounding the Greentec buildings and has gained approval for development of 850 housing units along with retail and office space, as well as an age-restricted community.
The seller, represented by Transwestern’s Robert Filley, was C-III Asset Management, acting as special servicer for the former mortgage lender, Bank of America.
Fort Washington apartments sold
In another deal, Ross Development & Investment of Bethesda and Invesco Real Estate in Atlanta sold the 324-unit Remington Place Apartments in Fort Washington to Cafritz Co. for $28.5 million, according to ARA Mid-Atlantic.
The two residential towers, completed in 1975, are on Brinkley Road, just south of the Capital Beltway. The property is less than four miles east of Joint Base Andrews, and less than four miles west of National Harbor.
“By focusing the market not only on the value add opportunity of the property but the exceptional economics and apartment fundamentals of the submarket, this assignment gave the ARA team the opportunity to deliver fantastic results for an extraordinary ownership group,” ARA partner Drew White said in a news release.