| Location: | Washington, D.C. (Southwest) |
| Property Type: | Office |
| Square Feet: | 607,736 SF |
| Purchase Date: | December 2006 |
| Purchase Price: | $169,000,000 ($278 PSF) |
| Strategy: | Opportunistic |
OPPORTUNITY
2100 2nd Street, commonly referred to as the U.S. Coast Guard Headquarters building, is an 8-story 607,736 square foot office building located in the Southwest submarket of Washington, D.C. The building is situated on one of only two privately owned parcels along the Anacostia River, an area seeing a substantial revitalization amidst construction of the new baseball stadium. Built in 1973 it has since functioned as the headquarters for the Coast Guard, which through the General Services Administration (GSA) leases 100% of the office space through 2008.
At the time 2100 2nd Street was being marketed it was widely believed that Coast Guard would renew its lease upon 2008 expiration, although the Department of Homeland Security’s potential relocation to the nearby St. Elizabeth’s campus brought uncertainty to rental rate and lease term, making the potential upside challenging for prospective purchasers to quantify.
The asset will benefit from the significant new developments 
in the immediate vicinity, including the new Washington Nationals baseball stadium, multiple privately financed mixed use developments, and approximately $8 billion of neighborhood investments to be generated by the Anacostia Waterfront Initiative (a government sponsored enterprise established to lead the economic revitalization of land along the Anacostia River).
TRANSACTION
Monday Properties acquired 2100 2nd Street in December 2006 with Apollo Real Estate Advisors (Apollo) for a gross purchase price of $169 million ($278 PSF), a 5.9% cap rate on year 1 NOI of $10 million. At closing, the Monday/Apollo joint-venture contributed $38 million of equity and financed $135 million financed through a senior loan provided by Citigroup.
BUSINESS PLAN
Monday Properties will utilize its GSA expertise and leverage existing relationships gained through a longstanding track record with the GSA to create a favorable renewal environment. Its specific experience in navigating the GSA is prerequisite to a successful business partnership and further renewal negotiations. Monday has catered to the unique needs of the Coast Guard and will continue to provide high-quality building services in order to create support and momentum for lease renewal.
Monday or affiliates have consummated over $700 million in lease transactions and currently manage over 1.2 million square feet of space leased to the GSA. The importance of the depth and breadth of this experience should not be understated, as it provides an excellent opportunity to enhance revenue through a renewal at rates in excess of those being contemplated at the time of acquisition.
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