Allianz, Columbia Team Up on $421M DC Purchase

By Gail Kalinoski

1800 M St.

Three months after forming a $1.3 billion joint venture to acquire Class A office properties in several U.S. gateway markets, including Washington, D.C., Columbia Property Trust and Allianz Real Estate have made their first purchase together in the nation’s capital, paying $421 million for 1800 M. St. HFF represented seller PGIM Real Estate, an affiliate of Prudential Financial, and procured the buyer.

The 580,930-square-foot, recently repositioned Class A office building is located at the corner of 18^th and M streets. The 10-story, LEED Gold-certified property has three levels of below-grade parking, ground-floor retail, dual lobbies, six private tenant terraces, a rooftop deck, fitness center and nine corner offices per floor. The building is in the city’s Golden Triangle area and is less than a five-minute walk from Farragut Square, Dupont Circle, Restaurant Row and Connecticut Avenue. It is within blocks of three Metro stations and close to some of the city’s most popular neighborhoods including Logan Circle, Dupont Circle and Georgetown.

“1800 M Street is an asset that epitomizes our investment program with Columbia Property Trust. It is a Class A, transit-oriented, office property situated among renowned dining, retail and entertainment venues and attractive residential neighborhoods, all within one of the global gateway cities Allianz has confidence in,” Christoph Donner, CEO of Alliance Real Estate of America, said in a prepared statement.

The recent renovation and repositioning resulted in 400,000 square feet of leasing activity at the building which brought it to 94 percent occupancy. 1800 M. St. is currently leased to 34 tenants.

The HFF investment sales team representing the seller included Senior Managing Directors Andrew Weir and Jim Meisel, Executive Managing Director Stephen Conley and Director Matt Nicholson. The firm’s National Co-Head of Investment Sales Manny de Zarraga and the Global Capital Team comprised of Senior Managing Directors Dan Cashdan, Riaz Cassum, Coleman Benedict and Gerry Rohm assisted with the marketing effort.

Allianz, Columbia JV Launch

The Allianz and Columbia joint venture was announced in July, with Washington, D.C, Boston, New York and the San Francisco Bay Area eyed for future acquisitions. They launched the JV with each firm contributing one or more unencumbered assets. Columbia contributed University Circle, a three-building, 451,000-square-foot office complex in Palo Alto, Calif., valued at $540 million, and 333 Market St., a 657,000 square-foot office tower in San Francisco’s Financial District valued at $500 million.

Allianz contributed 114 Fifth Ave., a 352,000-square-foot building in Manhattan’s Flatiron District valued at $220 million it owned as the majority stakeholder.

Columbia, an Atlanta office REIT, recently finished renovating 80 M. St. in Washington, D.C. The $3 million renovation transformed the 285,000-square-foot, seven-story building in a Class A office asset. Located in the Capital Riverfront submarket, one of the city’s fastest growing neighborhoods, some of the building’s main tenants are General Dynamics Information Technology, Vermont Investment Corp. and WeWork, which leased 68,673 square feet last November.