Office Properties Income Trust Sells Northern Virginia Building

3920 Pender Drive

Office Properties Income Trust has sold an 83,130-square-foot property in Fairfax, Va., for $22.2 million. The buyer was Washington Alliance Capital, according to public records. The price for the property at 3920 Pender Drive included the repayment of $13.2 million of mortgage debt with an annual interest rate of 5.87 percent, but excluded closing costs. Proceeds from the sale will be used for general business purposes.

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The Class B building was completed in 1981 and is leased in part to the State Department. In a prepared statement, OPI President & CEO David Blackman noted that the sale represents the final disposition of the six properties that were under purchase and sale agreements at the end of 2019.

OPI focuses on owning, operating and leasing buildings primarily leased to single tenants with high credit quality characteristics, such as government entities. The REIT is managed by the operating subsidiary of The RMR Group Inc., an alternative asset management company headquartered (like OPI) in Newton, Mass.

Steady sales

OPI was formed in late 2018 through the merger of Government Properties Income Trust and Select Income REIT.

The string of sales that Blackman referred to has been a steady deleveraging process. It includes the sales of:

• A 129,035-square-foot downtown Washington, D.C., office building to Georgetown University for $70 million in March 2019.
• A three-building office portfolio in Baltimore and Rockville, Md., for $61.9 million last November.
• In December, a 148,488-square-foot office building in San Diego for $23.8 million.
• Two office buildings, in New Jersey and Illinois, for $42.1 million just a week ago.

Office building sales in Northern Virginia totaled $745.2 million in the fourth quarter, according to a report from Lincoln Property Co., though that figure was boosted by CW Capital’s $210.7 million sale of the (rather distressed) Skyline Office Portfolio, a/k/a 5107-5275 Leesburg Pike in the Falls Church submarket, to Somera Road. The overall direct vacancy in Northern Virginia is 13.0 percent on an inventory of 186.7 million square feet, and the average asking rent is $32.81, again per LPC.