MetLife Inc and an undisclosed joint-venture partner have bought Washington, D.C.'s largest, privately-owned office building, the insurance company said on Thursday.
The purchase price for Constitution Center at 400 7th Street SW was about $730 million, a person familiar with the transaction said. The price would be a record for an office building in the district, according to real estate information provider Real Capital Analytics.
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Insurers, hungry for yield, have been buying up well-leased buildings that offer higher returns than bonds and relatively similar safety.
"We are pleased to acquire an asset of this quality, which will provide attractive returns over a long-term investment horizon," Robert Merck, MetLife's global head of real estate investments, said in a statement.
While consolidation and proposed cutbacks of federal government spending has weakened the demand for office space in Washington, D.C., the fully leased building does not face near-term lease expirations, said Dan Fasulo, Real Capital Analytics managing director.
A $250 million renovation was completed earlier this year at the 10-story, 1.4 million square-foot building.
The building houses several major U.S. government agencies, such as the Federal Housing Finance Agency, the Office of the Comptroller of the Currency and the Federal Trade Commission.
MetLife's joint venture partner, an institutional investor whose identity was not disclosed, was advised by Clarion Partners Llc. Eastdil Secured Llc brokered the sale.
(Reporting by Ilaina Jonas; editing by Leslie Gevirtz, G Crosse)