Famed Watergate office building to be sold for $107 million

Bloomberg

Washington’s Watergate office building, made famous by the political scandal that brought down President Richard M. Nixon, is under contract to be sold.
New York real estate investment firm Steinbridge Group and Dallas-based Lincoln Property Co. are buying 2500 and 2600 Virginia Ave. NW, also known as Watergate East, for $107 million, according to the document by brokerage Holliday Fenoglio Fowler LP.
The 12-story, 270,000-square-foot (25,100-square-meter) office property in the Foggy Bottom neighbourhood, about a mile west of the White House, is part of a six-building complex that also includes co-op apartments and a hotel that has just been renovated. Burglars in 1972 broke into the office building’s 11th floor, then the headquarters of the Democratic National Committee, a crime that ultimately led to the unraveling of the Nixon presidency.

Earlier Sale
The seller is a partnership led by Greenfield Partners LLC, a Westport, Connecticut-based real estate investment-management firm, said a person with knowledge of the transaction, who asked not to be named because the details are private. Washington-based Penzance Cos., said to be part of the partnership, paid $76 million for it in November 2011, data from Real Capital Analytics Inc. show.
That sale resolved a “troubled situation,” according to Real Capital, in which the property was controlled by a creditor after owner BentleyForbes fell into debt following the 2008 financial crisis.
Russ Colchamiro, a spokesman for Steinbridge Group, said the company won’t comment. Calls to Mack Pogue, founder and chairman of Lincoln Property, and Tim Byrne, its president, weren’t returned.
Principals of Steinbridge have managed and leased more than $12 billion of institutional capital in the U.S., Europe and the Middle East, according to the firm’s website. Steinbridge’s CEO is Tawan Davis, who was vice president for real estate transactions at the New York City Economic Development Corp. during the administration of Mayor Michael Bloomberg. The former mayor is the founder and majority owner of Bloomberg News parent Bloomberg LP.
Davis later worked as chief investment officer at Peebles Corp., run by developer R. Donahue Peebles.
Lincoln Property has developed more than 75 million square feet of office space and manages 29 million square feet in the Washington area, according to the financing document for the Watergate purchase.

Office Tenants
The building has about 205,000 square feet of offices, with the rest retail space, according to the person with knowledge of the deal. About 14 percent of the office space is vacant, and asking rents are about $47 a square foot, according to leasing-data firm CoStar Group Inc. Tenants include the National Trust for Historic Preservation, George Washington University and Sage Publications.
The owners of the hotel, which shares a wall with the office building, recently completed a $125 million makeover by Israeli architect Ron Arad. The project restored the “luxury and glamour” of the 1960s, when it was new, Jacques Cohen, founder of Euro Capital Properties, said in a June 14 interview on Bloomberg Television.