FINMARC MANAGEMENT ACQUIRES 11-BUILDING INSTITUTIONAL-QUALITY FLEX/OFFICE/DATA CENTER PORTFOLIO IN SPRINGFIELD, VA FOR $127.5 MM
Posted on: 25/01/2023

Finmarc Management, Inc., a commercial real estate investment and management firm headquartered in Bethesda, Maryland, has acquired from Boston Properties, Inc. (NYSE: BXP) an 11-building portfolio comprising approximately 740,000 square feet of flex/office, industrial and data center space in Springfield, Virginia for $127.5 million. The single-story and two-story assets, located close to Fort Belvoir, the National Geospatial-Intelligence Agency and Marine Corps Base Quantico were cumulatively 74% leased and occupied at the time of the sale. William Collins and Eric Berkman of Cushman & Wakefield represented the seller and Finmarc was self-represented.

                Portfolio overview

Situated adjacent to Interstate 95 and Fairfax County Parkway, the buildings range from 27,000 to 105,000 square feet of space with six currently 100% leased and occupied. Representative tenants include ADT Security Systems, Avaya, SAIC, The Vomela Companies and the United States General Service Administration. The buildings are situated on Boston Boulevard, Corporate Court and Grainger Court.  

                Northern Virginia industrial market ended 2021 with record low 4.2% vacancy level   

The presence of Fort Belvoir, National Geospatial-Intelligence Agency and Marine Corps Base Quantico is a significant economic driver that helped produce a record low 4.2% vacancy rate for industrial real estate product at the end of 2021. The region’s warehouse vacancy rate decreased to 2.5% and more than two million square feet of flex/office and warehouse space was leased last year. No new buildings are currently under construction and no new product has been delivered in the Newington/Springfield submarket over the past five years, contributing to a 9.8% rent growth in the past 12 months and a nearly 42% rent growth in the past decade. 

“This acquisition continues Finmarc’s long-term investment strategy of identifying and purchasing institutional-quality assets with a compelling value-add component in suburban submarkets that demonstrate long-term strength and viability,” explained Finmarc’s Co-Founder and Principal David Fink. “We intend to grow the net operating income by aggressively marketing the available space to achieve 100% occupancy of the portfolio, as well as elevating rents to existing market rates. We will additionally build value by implementing proven asset management systems and protocols that maximize operational efficiencies.”

Late last year, Finmarc entered the North Carolina market with its acquisition of Plantation Point Shopping Center, a 383,000 square foot shopping center located in Raleigh for $58 million. Plantation Point was 91% leased and occupied at the time of the transaction and features anchors Burlington, BJs Wholesale Club, Big Lots, Dollar Tree and LA Fitness and earlier this year, Finmarc purchased Providence Town Center, a 760,000 square foot retail center anchored by Wegman Food Markets and located northwest of Philadelphia, together with KPR Centers, for $161.75 million.

Strategic location with direct access to Washington, D.C. and Richmond

The portfolio features immediate access to Interstate 95 and is situated in a quintessential last-mile delivery site that is situated approximately four miles from Springfield, 15 miles from Washington, D.C., 30 miles from Dulles International Airport and 95 miles from Richmond. More than 34,000 companies reside within the Northern Virginia region, and those companies employ more than 615,000 people.

“We acquired this portfolio at below replacement cost and the in-place tenancy, which includes several federal government entities, will generate steady cash flow,” said Finmarc Principal Neil Markus. “We believe well-located and best-in-class flex/office and industrial buildings situated in the outer ring suburbs will continue to flourish and we remain extremely confident in the long-term economic fundamentals of the Springfield and Northern Virginia submarket.”  

 Michael Zelin and Marshall Scanlon of Cushman & Wakefield provided services to procure the financing, Joe Hoffman and Aaron Rosenfeld of Kelley Drye & Warren provided legal services and Cliff Mendelson of Met Cap Advisors acted as a consultant with securing the debt.

Finmarc Management, Inc. is a fully integrated commercial real estate company that focuses on real estate investment, management, leasing and development of retail, industrial/flex, and office properties throughout the Mid-Atlantic region. The firm presently owns and manages a portfolio encompassing approximately 7.7 million square feet of commercial properties located in Maryland, Washington, D.C., Virginia, Delaware and Pennsylvania. For additional information visit www.finmarc.com