A downtown office building in Washington, D.C., sold for less than a third of its sales price almost a decade ago.
AEW Capital Management sold 2001 L St. NW this month to Melrose Solomon Enterprises for about $30.5 million, a major price drop compared to 2015 when the property sold for about $98.9 million, according to CoStar data.
AEW was not immediately available to comment on the deal. The buyer — through Melrose DC Holdings II, Melrose DC Holdings and Orange You Glad Groves 3 — received a $16.8 million loan from bank Hingham Institution for Savings for the deal, according to a document from the Office of Tax and Revenue. Representatives for the buyer did not immediately respond to an email or phone request for comment.
LaSalle Investment Management bought the property in 2015 and later transferred ownership to AEW, CoStar data shows.
The sale comes as the D.C. office market has faced a growing amount of vacancies with the rise of remote work and the slow return to physical offices by the federal workforce.
A quarterly report from the city’s Office of the Chief Financial Officer last month said the “commercial office real estate market remains weak” with an average vacancy rate for office buildings in the central business district reaching 18% in the second quarter.
"The office real estate market poses a significant risk to the local economy, with the growing volume of vacant office space a major concern," the report said.
It's unclear if AEW decided to sell the building at 2001 L St. NW to mitigate its risks in the D.C. office market. Other investors such as Brandywine Realty Trust have announced plans to exit the D.C. office market since it is not performing well.
The roughly 170,000-square-foot building at 2001 L St. NW was 68% occupied at the time of the sale, according to CoStar. Located near Washington Circle and Farragut West, the 10-story office building opened in 1986 and was renovated in 2014. It had a 2023 total assessed value of $97.3 million.