By Dave Sebastian
Washington Real Estate Investment Trust said it has agreed to sell substantially all its office portfolio to a Brookfield Asset Management private real-estate fund for $766 million, a move WashREIT is pursuing to become a multifamily property owner.
The REIT on Tuesday said the office portfolio sale comprises 12 office assets, consisting of 2.37 million square feet in the Washington, D.C., metropolitan area.
The company said it expects the deal to close in the third quarter. WashREIT said it also signed a letter of intent to sell its remaining eight retail assets and expects to complete the sale in the third quarter.
WashREIT said it plans to use proceeds from the sale and future retail sales to fund the expansion of its multifamily platform through acquisitions in the Southeastern markets and to repay outstanding debt.
"Completing this sale will allow us to strengthen our balance sheet by eliminating near-term debt maturities until 2023," Chief Executive Paul McDermott said.
With the transaction, WashREIT will own only one office asset, Watergate 600, which is a 295,000-square-foot office in Washington. It said it plans to dispose of the office to become a 100% multifamily REIT.
WashREIT said its multifamily strategies focus on the midmarket renter, which it sees as the deepest part of the demand curve. The Southeastern markets it sees as high-growth are Atlanta, Raleigh-Durham and Charlotte.
The company said the outlook it had provided on April 28 for 2021 general and administrative expense and interest expense is no longer in effect, as it hasn't taken into account the proposed transaction.
Write to Dave Sebastian at firstname.lastname@example.org
(END) Dow Jones Newswires