Aloni Hetz reports today that Carr has signed a memorandum of understanding for the sale of 49% of the rights and debt at the Midtown Center in Washington DC, at a total value per complex of $ 980 million (the value of the complex in Carr’s library at the end of September 2020 – $ 965 million).
From the value of the complex, a loan of $ 525 million will be deducted, due for repayment in October 2029, which is guaranteed by the mortgage of the complex, so that the scope of the transaction (100%) is $ 455 million. If and when the sale is completed, Carr is expected to receive $ 493 million for 49% of the rights in the complex, less the said loan.
The complex, which is fully leased, has a total rental area of ​​869,000 square feet, of which 714,000 square feet are rented, for long-term rent, to Fannie Mae and 100,000 square feet are rented to We Work for long-term rent. The average rental turnover in the complex is 13.1 years and it is expected to yield in 2021 NOI in the amount of $ 46 million.
Closing is expected to be completed by the end of the current quarter and, as usual, is subject to due diligence and the existence of conditions precedent. In return for the sale, to the extent that it is executed, it will use Carr for its continued growth and business development.
Mr. Nathan Hetz, CEO of Aloni Hetz said: “We are pleased to update that carr has signed a memorandum of understanding for the sale of 49% of the Midtown Center property in Washington DC, at a value of $ 980 million. The cost of the project, which was completed in less than two years, is $ 630 million, and during the five years since its construction began, Carr has accumulated a cumulative profit of about $ 350 million.
The property that won the title of the best office building in Washington was built to the highest standards in the market thanks to the extraordinary abilities of the Carr team to initiate and set up a project of this magnitude and rent it to a quality tenant – Fanny Mei for 15 years.
This deal proves that in buildings of such quality with an advanced and modern construction standard, location in a main business center and strong anchor tenants, there has been no real drop in prices since the outbreak of the Corona crisis. “