Jair Lynch Development Partners has completed its business plan and sold a five-story office building on the H Street corridor in Northeast D.C. to a Boston-based REIT making its first District buy.
US REIF 645 H Street Washington DC LLC, an affiliate of Intercontinental Real Estate Corp., paid $51.4 million for the 82,000-square-foot 645 H St. NE, or roughly $626 per square foot gross. With credits, the net sale came to about $600 per square foot.
Steve Centrella, Intercontinental’s senior director of acquisitions, said the REIT was attracted to H Street because it is “an area in transition,” and specifically to this building because it is fully leased to the District government and CVS.
“The H Street corridor will try to mimic the U Street corridor,” Centrella said. “We don’t know, but we’re hopeful we’ll get there.”
Jair Lynch, as 645 H St. NE Office PJV LLC, acquired 645 and 609 H, in addition to a single-story retail building, in October 2011 for $51.5 million. Working with the District government — the anchor tenant at 645 H — the developer overhauled all five floors of the office building and added a CVS to the ground floor.
At 625 H, Jair Lynch, with Donohoe Construction, is building a nine-story apartment building with 181 units, a five-story, wood-frame residential building with 126 units, three levels of underground parking and ground-floor retail.
In addition to its H Street development, Lynch, with McFarlane Partners, has big plans for Half Street Southeast, next to Nationals Park — a project that will demand a healthy amount of capital. Jair Lynch was not immediately available for comment.
This is the first D.C. buy for Intercontinental, and only its second in the region, having acquired 2900 Eisenhower Ave. in Alexandria in June 2014 for $18.2 million.
“There’s definitely more to come,” Centrella said. “We like D.C. We look for some relative value all the time. And I know some of the fundamentals in D.C. are softening, so we’ll have a sharper eye out.”
The Department of Human Services’ Economic Security Administration’s H Street service center and administrative offices operate out of 645 H. That lease conveys with the new owner, a spokesman for the Department of General Services confirmed.
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