The Meridian Group formed a joint venture with affiliates of WeWork Property Advisors to acquire 1333 New Hampshire Ave. NW, a 350,000-square-foot office building in Washington, D.C., from Boston Properties. At the time of the transaction, the building was 84 percent leased to law firm Akin Gump Strauss Hauer & Feld, which has called the property home for more than 25 years. The company is slated to end its long run in August of next year.
The property straddles the CBD’s Golden Triangle submarket and Dupont Circle markets, at the confluence of residential and office neighborhoods. It boasts easy access to drivers, metro riders and walkers and can appeal to small tenants and large tenants alike.
“The scale and location of the building make it a very attractive repositioning opportunity,” Salem Tierce, The Meridian Group’s senior vice president, told Commercial Property Executive. “Additionally, because it’s been long-term leased to a law firm, the building has never really been available to the wider market.”
The asset traded for an undisclosed amount, but WeWork Property Advisors affiliates contributed 50 percent of the equity. WeWork Cos. Inc. will eventually lease a little more than 100,000 square feet in the building.
“We continue to believe that placemaking is the driver to success in office leasing,” Gary Block, The Meridian Group’s chief investment officer, told CPE. “Here, we have a huge opportunity to offer a unique experience to tenants from the liveliness of the neighborhood and street outside to the amenity package on the inside. The fact that we have WeWork anchoring the project will add to that liveliness and give the building a non-traditional character that many tenants today find attractive.”
Substantial improvements on the way
Meridian intends to renovate the 12-story building, with upgrades starting next year. Plans are to resurface and enhance the exterior, modernize the lobby and add high-quality amenities. The company will also construct a large indoor/outdoor amenity at the penthouse level, which will boast panoramic views of the district and Northern Virginia.
“Differentiating this building from typical office buildings is our key focus, which we will implement through select renovations to common areas, exterior ground level improvements, and through the addition of market-leading amenities,” Block added.
Eastdil Secured represented both parties in the transaction with the firm’s Collins Ege handling things on the buyer’s side and the firm’s Nicholas Seidenberg securing senior financing for The Meridian Group.
In April, The Meridian Group sold its majority interest in Boro Station, a three-building office complex in the Washington, D.C.-area, to MetLife Investment Management, recapitalizing the property in a joint venture partnership.
Image courtesy of The Meridian Group