AXA, Stewart Investment acquire D.C. office property

AXA Investment Managers – Real Assets, a global leader in real asset investments and a leading real estate portfolio and asset manager in Europe, in a joint venture with Stewart Investment Partners, has acquired an office property located in Washington, D.C.’s East End submarket.

The 210,000-square-foot office property is located at 1401 New York Ave. NW.

The joint venture acquired the property from Heitman and Minshall Stewart Properties.

The class A, LEED Gold certified office building is spread across 12 floors, including ground-level retail and a below-grade parking garage.

This transaction comes shortly after the acquisitions, on behalf of clients, of a 264,000-square-foot office asset in Dallas; Montgomery Tower, a 367,000-square-foot office asset located in downtown Bethesda, Md., just outside of Washington, D.C.; and University Center Chicago, a 1,732-bed student housing property located in Chicago.

The property marks AXA’s second office investment in the D.C. metro area, said Aaron Kutner, head of U.S. acquisitions at AXA IM – Real Assets.

The fourth quarter of 2017 registered the highest quarter of new leasing activity in 2017 for Washington, D.C.’s office market, closing at more than 2.1 million square feet and boosting the annual total to over 6.5 million square feet, 24.4 percent above the 10-year average, according to Cushman & Wakefield.

Washington D.C.’s office vacancy rate increased to 12.4 percent in fourth quarter 2017 as well, up from 12.1 percent in fourth quarter 2016.

Cushman & Wakefield predicts the pipeline of new supply delivering to the city, particularly in the core submarkets (CBD and East End), will continue to grab headlines in the Washington, D.C., office market for years to come. With 5.7 million square feet currently under construction and another 2.6 million square feet slated to break ground in the next 18 to 24 months, asking rates should begin to pull back as landlords chase limited demand, especially for the lower floors of new projects in the CBD.