No. Virginia Submarket Office Sale "Breathtaking" at $420 PSF

In a gutsy move to secure his bidding position, Ralph Dweck of Dweck Properties was willing to forgo the traditional study period in the acquisition process to buy Stafford Place II in Arlington, Va. for a record-breaking $420 per square foot, or $73.5 million.

"It was a breathtaking moment for me as a broker," said Warren Dahlstrom, senior director at Cushman & Wakefield Inc., who represented the seller Lord Baltimore Properties. "Ralph has deep pockets, but he knew that to compete with institutional investors he needed to out-maneuver them in transaction pacing."

Two other bidders offered the same purchase price, but only Dweck would nix the study period, which allows the potential buyer to review the market and leasing before putting down a non-refundable deposit. Traditionally, 30 to 45 days is considered a normal study period length. But some buyers have truncated that period to no more than five days in the hot D.C. metro market.

Built in 1999, the 175,000-square-foot office building is located in the Ballston submarket of Northern Virginia. Occupancy is at 100 percent, 35 percent of which is held by the National Science Foundation. Dahlstrom noted that several lease rollovers are imminent, but also that the new owner has no concerns over leasing. Several existing tenants have already expressed interest in expanding.

"Our position going to the market is that Ballston is pretty much built out," Dahlstrom noted. "There are three office sites available that are already under construction with pretty good leasing already done. That market is finished." Rents in the submarket are averaging $30 per square foot with vacancy posting 10 percent at the end of the first quarter, according to CB Richard Ellis Inc.

Dweck Properties recently acquired two other Ballston office buildings: Arlington Gateway for $125 million from the JBG Companies, and Ballston Metro Center for $61 million.

Jim Luck, Martin "Chip" Ryan and Stewart Calhoun of Cushman & Wakefield joined Dahlstrom in representing Lord Baltimore Properties.