Exelon Corp. has acquired 701 Ninth St. NW in Washington, D.C., the headquarters of its Pepco Holdings subsidiary. Brookfield Properties sold the Class A asset for $175 million.
“The strategic sale of 701 Ninth St. NW underscores Pepco Holdings’ commitment to the District and Brookfield’s disciplined approach to unlocking value for our investors,” a Brookfield spokesperson said in a statement provided to Commercial Property Executive.
Brookfield had purchased the 10-story, 364,000-square-foot office building, also known as Edison Place, for approximately $169.8 million in March 2004, according to CommercialEdge. Pepco Holdings had owned the 2001-completed asset before the sale to a Brookfield affiliate. Exelon, one of the nation’s largest utility companies, acquired Pepco in a $6.8 billion merger in March 2016.
A Pepco spokesperson told CPE the purchase of its longtime D.C. headquarters is expected to offer long-term savings for its customers that may offset future increases from inflation or other costs. The spokesperson also mentioned the property serves as a central hub for Pepco teams who work across the District and portions of Montgomery and Prince George’s counties in Maryland.
Exelon and Pepco are also committed to the continued revitalization of the Gallery Place/Chinatown neighborhood and will continue to use the Pepco Edison Place Gallery within the building to support nonprofit and community-focused events.
Located in downtown D.C. between G Street NW and H Street NW, the LEED Gold-certified building has 14,000 square feet of ground-floor retail, including the site of Zaytinya, a restaurant run by renown chef José Andrés. The mid-rise has 36,400-square-foot floorplates, according to CommercialEdge.
Brookfield dispositions
The sale of Edison Place comes just weeks after Brookfield sold 750 Ninth St. NW, also known as the Victor Building for $153 million. The firm used the sale proceeds to pay off the remainder of existing property debt, a $155.6 million loan from June 2015, the Washington Business Journal reported.
In August, Brookfield sold Potomac Tower, a fully leased, 20-story, 242,000-square-foot office tower at 1001 19th St. in Rosslyn, Va., also in the D.C. metro office market, to its largest tenant for $143 million. The sale involved two transactions—$113.8 million for the building and $29.2 million for the land, according to WBJ. Brookfield had acquired the building, designed by famed architect I.M. Pei, in 2004 for $106 million.
The dispositions are part of Brookfield’s capital allocation management strategy. It has recently been selling some of its properties as it looks to deploy capital toward high-performing assets elsewhere in its portfolio.
In March, Brookfield sold 333 W. 34th St., a 10-story, 346,728-square-foot office building in Manhattan, for $150 million. The sale price was about $105 million or 60 percent lower than the 2018 acquisition value.
This story originally appeared on Commercial Property Executive.
