The office sector has been besieged by bad news, but one recent bright spot is a significant foreign investment that just happened in Washington, D.C. An affiliate of Tokyo-based Mori Trust Co. made its first D.C. purchase recently, acquiring a Mount Vernon Triangle office building for $531 million from Boston Properties. The transaction is D.C.’s largest property sale of the year so far, beating out Nuveen Real Estate’s $375 million purchase of an office from Tishman Speyer.
The office building sold by Boston Properties to the Japanese developer is at 601 Massachusetts Ave. NW and is anchored by Arnold & Porter, a multinational law firm that signed up to pre-lease a sizeable chunk of the 460,000 square foot property for its headquarters in 2013. Boston Properties built the development in less than three years at the cost of $350 million. This is Japanese developer Mori’s first D.C. acquisition, but they’ve been active in the district’s suburbs. The investor has sought to invest about $1.43 billion in real estate outside of Japan since 2016, previously acquiring office properties in Boston and Silicon Valley.
Mori’s investment is one of many coming from foreign investors that continue to see the U.S. commercial real estate market as attractive in the short and long term. About 75 percent of global investors said they planned to increase their activity in the U.S. in 2022, and 25 percent said they anticipate their activity will increase considerably, according to one survey. Japanese investors like Mori have been active in America, but Canada remains the top source of international direct investment in U.S. commercial real estate.