BXP is cashing in on the nation's office market rebound with a deal to sell its stake in a project it opened about five years ago during a much bleaker time for office valuations.
The Boston-based real estate investment trust has offloaded its 50% interest in the Bethesda, Maryland, project that now houses the headquarters for Marriott International in a deal with its joint venture partner, The Bernstein Cos. The agreement values the property at 7750 Wisconsin Ave. for $430 million.
BXP, the nation's largest office landlord, is walking away with about $83 million in net proceeds, the company confirmed. It's the latest in a string of dispositions it has made across the country in an effort that echoes strategies among other property owners looking to get ahead of a post-pandemic rebound.
BXP and Bernstein finished construction on the 743,000-square-foot property in 2021, a $600 million project that is now widely viewed as one that has helped reset the bar for premium office space in and around the Washington, D.C., area.
The global hotel conglomerate leases the entirety of the 21-story building, which includes a roster of amenities that Marriott executives have previously said helped entice workers to commute to the office after the pandemic-induced period of working from home. The corporate hub provides a 11,000-square-foot child-care center; 180 conference rooms; a high-end cafeteria and design lab, all of which "encourage folks to be here several days a week, and not just for meetings," Marriott CEO Anthony Capuano said of the headquarters space once the hotel chain officially took occupancy in late 2022.
Marriott is among a parade of office tenants throughout the United States that have invested in office space as a way to convince employees that in-person work is far more attractive than any kitchen table setup. Those investments have formed a critical backbone for the national office market as leasing momentum builds back to pre-pandemic levels of activity, and the demand for space in trophy properties is coming close to exceeding what's available.
Looking ahead
That confidence has already prompted BXP to kick off new developments in markets such as New York and D.C., a pipeline of projects that has landed early high-profile deals reinforcing signs that the market has turned a post-pandemic corner.
The deal with Bernstein for Marriott's headquarters fits BXP's broader strategy to selling select properties to free up the capital for higher-quality replacements as demand and valuations for office buildings rise.
The sale "positions us well to reinvest in new opportunities and further our commitment to high-quality assets across the Washington, D.C. region," Pete Otteni, BXP's executive vice president and co-head of BXP's D.C. region, said in a statement to CoStar News.
Within the first few weeks of the year, BXP closed more than $1 billion worth of deals across the country, a flurry that included a mix of lower-tier office, multifamily and land sites in markets such as Boston, Northern California's Silicon Valley and Washington, D.C. That effort has been supported by renewed interest among buyers both big and small that are looking to capitalize on the improving market.
Institutional investors are largely coming off the sidelines, helping to send office sales volume up 20% in 2025 when compared with 2024, according to CoStar research.
That interest is expected to heat up competition among prospective buyers, a trend BXP is looking to capitalize on as it plans to redirect capital to other investments.
The landlord last year initiated construction on new ground-up developments in New York City and Washington, D.C., a total of three projects that are already well on their way to becoming fully preleased.
Amid the flurry of sales, BXP closed on the acquisition of 2100 M St. NW in Washington, D.C.'s West End. The REIT is demolishing the property to make way for a 320,000-square-foot trophy development, with global law firm Sidley Austin as its anchor tenant.
For the record
A team of CBRE brokers including Tommy Cleaver, Bill Shanahan, Dan Grimes and Chloe Neal represented BXP in the deal with The Bernstein Cos.