Brookfield Sells Another Office Building
Rockwood Capital has acquired a 1909-vintage, 316,000-square-foot Class A office building in Washington, D.C., from Brookfield Properties for $153 million, according to CommercialEdge information.
In pursuit of this acquisition, Rockwood obtained a $113.4 million loan from Deutsche Pfandbriefbank AG of Garching, Germany. The seller used the proceeds to pay off the remainder of a $155.6 million loan from June 2015 that was tied to this asset, Washington Business Journal reported.
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The nine-story property, known as the Victor Building, is at 750 Ninth St. NW in the East End submarket. The asset came into Brookfield’s portfolio in 2005, when the Smithsonian Institution sold it for $157.5 million.
Most recently renovated in 2021, the LEED Gold-certified building features floorplates ranging from 27,290 square feet to 35,257 square feet, as well as 22,000 square feet of retail space, CommercialEdge shows. The property’s office tenants include the Smithsonian Institution, Blue Cross Blue Shield, the Federation of American Hospitals and law firm Akerman.
A troubled time
The Victor Building sale appears to have been at least the second recent sale by Brookfield Properties that closed at a less-than-profitable price.
Nearly two weeks ago, company sold a 10-story, 346,728-square-foot office building in Manhattan’s Times Square–Hell’s Kitchen submarket for $150 million—about $105 million or 60 percent less than it had paid for the property in 2018.
The office market in the nation’s capital “faces a potential turning point as private sector and federal in-office work mandates converge with record-low development, slowing vacancy expansion after years of post-pandemic increases,” Marcus & Millichap reported in a 2025 forecast.
However, uncertainty remains, as the federal government still occupies nearly 30 percent of the D.C. metro’s office stock and the GSA might be terminating up to 7,500 leases in coming years, the forecast continued.
In the crossfire between a limited pipeline of new supply and space reductions by the federal government, Marcus & Millichap expects the metro area’s overall office vacancy to rise to about 21.3 percent.
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