Spanish investor buys Washington, D.C., property for $385m

Spain’s Ponte Gadea has acquired The Investment Building, a 401,433-square foot office in Washington, D.C.’s, central business district, for $385.4 million, according to media outlets.

The seller was a joint venture between J.P. Morgan Asset Management and JBG Smith.

The building is 92 percent leased.

Construction issues in the office market have resulted in some deliveries in the D.C. area being postponed, as tariffs on steel and other materials drive up overall costs and labor markets continue to tighten, according to Cushman & Wakefield. While these constraints should put a damper on new supply 24-36 months down the road, the reality is that nearly 2.7 million square feet of yet-to-be-leased space (almost entirely class A) is currently under development in a city that has averaged under 900,000 square feet of total net absorption annually over the past decade. Tenants have taken note of softening conditions and are getting out in the market well in advance of their existing lease expirations — as far out as three years — even for requirements smaller than 10,000 square feet in some instances.