Local Investors Step Into D.C. Office Bargains as Institutions Retreat
Smaller investors are acquiring D.C. office buildings at steep discounts as institutional owners offload properties at losses. John Mason’s Garfield Investments and Broad Creek Capital bought 1667 K Street NW for $26.2 million in July, 59% below its assessed value of $64.1 million. Taicoon Property Partners acquired 1400 K Street NW for $35.5 million, less than half its assessed value. FarmViewVentures bought 1250 Connecticut Avenue NW at foreclosure for $16 million, down from a $50 million valuation.
BGRE, formerly Brookfield Properties, has trimmed its D.C. portfolio from 31 buildings totaling 8 million square feet in 2012 to 11 buildings at roughly 3 million square feet today. The company faces a $377 million loan maturity on six properties that entered special servicing in August. James Campbell Co. sold four offices across the region in recent months, pivoting from office to industrial. Tishman Speyer sold 900 19th Street NW for about $30 million, less than half its assessed value.
Buyers plan substantial renovations to compete for tenants priced out of trophy space. Garfield and Broad Creek will invest $10 million at 1667 K Street, while FarmViewVentures plans $15 million at 1250 Connecticut. Class A office space in D.C. absorbed 218,400 square feet in the third quarter, the highest quarterly leasing activity since late 2024, according to CBRE. Sheppard law firm signed a 107,227-square-foot pre-lease at 2033 K Street NW, where In-Rel Properties plans a redevelopment of a building acquired for $20.5 million.
Institutional investors are redirecting capital to infrastructure and data centers as office returns remain uncertain. Brookfield Asset Management holds $262 billion in infrastructure assets and owns stakes in multiple data center platforms. Philadelphia’s Post Brothers, historically focused on office-to-residential conversions, now plans to develop new Class A office to capture tenant demand. Local investors say reduced acquisition costs allow them to fund renovations and achieve returns unavailable to sellers carrying legacy debt.
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