Real Capital Solutions buys DC office building for less than half of previous sale price

CoStar | December 23rd, 2024

Real Capital Solutions purchased the downtown Washington, D.C., office building at 1501 M St. NW for $29.3 million, less than half of its 2010 sale price of about $79 million, reflecting a broader trend of heavily discounted office transactions in the capital. Other nearby office properties have also traded this year at steep losses from prior values, as buyers take advantage of historically low pricing amid ongoing weakness in the office market.

The 11-story, 178,000-square-foot building is 61% leased and has seen significant upgrades since 2017, with additional improvements planned to boost tenant retention and leasing. The acquisition marks Real Capital Solutions’ entry into the Washington-area market and aligns with its strategy of acquiring distressed but well-located, operationally sound office assets.

Real Capital Solutions buys DC office building for less than half of
previous sale price
Transaction follows market pattern of discounted office deals
December 23, 2024
By Jonathan Lehrfeld, CoStar

An office building in downtown Washington, D.C., has sold for less than half of its previous
price.
Colorado-based Real Capital Solutions purchased 1501 M St. NW for $29.3 million, a fraction of
the $79.19 million it went for in 2010 when it was acquired by the asset management unit of
financial giant JPMorgan Chase.
“This acquisition represents our strategic approach to invest in high-quality office assets in a
prime location at a significant discount to replacement cost,” Marcel Arsenault, the head of
RCS, said in a statement shared with CoStar News. “In addition, it aligns with our disciplined
strategy of acquiring financially distressed, yet operationally strong, properties.”
Several other offices in and around the nation’s capital have sold this year at a discount
compared to their previous value. That includes 2001 L St. NW, which CoStar News
reported sold in October for a third of its past sale amount, and 1250 H St. NW, which sold in
November for less than half of its previous value.
Gerry Trainor with Transwestern Real Estate, who brokered the transaction, said on
LinkedIn the availability of the building ahead of the deal was an opportunity to capitalize on
“historically low” pricing in D.C.
Designed by Hartman-Cox Architects, the 11-story building totals more than 178,000 square
feet a block north of Fannie Mae’s Midtown Center headquarters at the corner of 15th and M
streets.
Completed in the 1990s, the building has undergone $13 million in upgrades to the lobby,
restrooms, fitness center and three-story “town hall” amenity space since 2017, according to
marketing materials.
RCS plans to add further improvements in “year one,” a spokesperson for the company said,
including expanding the town hall space to the seventh and eighth floors to increase tenant
retention and attract new leases.
The building is currently 61% leased with a weighted average lease term of 3.8 years. The deal
marks the entrance into the Washington-area market for RCS, the spokesperson for the
company confirmed.
JPMorgan declined to comment to CoStar News.

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