Skanska Sells DC Office Building for $163M

99M Building. Image courtesy of Skanska

Skanska has divested 99M, an 11-story, 234,000-square-foot office building in Washington, D.C., for $163 million, to an affiliate of Polinger Development Co.

The building is at 99 M St. SE in the Capitol Riverfront/Navy Yard submarket. The location is barely two blocks from Nationals Park and even closer to the Navy Yard–Ballpark station on the Metro’s Green line.

The LEED Gold certified building was completed in the second quarter of 2018. Gensler was the project architect, and McCaffery Interests was the general contractor. 99M is currently 87 percent occupied by a list of tenants including coworking provider Common Grounds, Pyxera Global and Give Campus.

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In addition to more than 10,000 square feet of ground-floor retail, the building’s amenities include 140 below-grade parking spaces, a 4,750-square-foot green rooftop terrace with catering capabilities, a 4,300-square-foot fitness facility, and a secured bicycle room with a fix-it area and room for 50 bikes.

Skanska’s other office developments in greater Washington include 2112 Penn; 1776 Wilson Blvd. and 733 10th and G.

A Mixed Picture

Polinger has a substantial presence in its home of metro Washington, including just in the District proper office buildings at 2401 Pennsylvania Ave. NW, 601 New Jersey Ave. NW, Capitol Plaza I and Van Ness Center, at 4301 Connecticut Ave. NW.

Though Washington, D.C., is both near the end of the current development cycle and still feeling the effects of the federal shutdown about a year ago, regional unemployment remains very tight, at 3.2 percent, according to a third-quarter report from Cushman & Wakefield. A total of 4 million square feet of new or substantially renovated office will have been delivered by year-end.

The Capitol Riverfront office submarket has an overall vacancy of 9.8 percent and was the only submarket to finish the third quarter below 10 percent. Citywide, Class A office space has an average overall vacancy of 13.2 percent, on an inventory of 63.1 million square feet.