Elme Communities has sold an office building in the historic Watergate complex in Washington, D.C., for less than half what it paid nearly a decade ago as the real estate investment trust continues to wind down its portfolio ahead of its liquidation.
Elme, a multifamily-focused real estate investment trust previously known as WashREIT, disposed of its last office property with the sale of the 12-story Watergate 600 building at 600 New Hampshire Ave. NW. Jetset Hospitality, a family office with a real estate team based in Washington, acquired the roughly 316,000-square-foot property for $52.5 million, according to a deed posted Monday with the city's Recorder of Deeds.
The price is well below the $135 million that Elme paid for the building in 2017, CoStar data shows. The Bethesda, Maryland-based firm has been selling its assets as part of a process to dissolve the company. Elme said it was on target to complete the sale of its remaining properties by the middle of this year. A spokesperson for Elme did not immediately respond to an email request for comment.
Watergate 600 was built in 1967 as part of the 10-acre Watergate complex, located on the banks of the Potomac River near the high-end Georgetown area.
Recognized as the first mixed-use development in Washington, the complex would be in headlines around the world five years later when five men broke into the Democratic National Convention to bug phone lines and steal documents in one of the most prolific political scandals in U.S. history, one that ultimately led to the resignation of then-President Richard Nixon.
"Needless to say, this is an iconic building," Stream managing director Matt Pacinelli said in an interview with CoStar News. Jetset hired Stream Realty to market and lease space at Watergate 600, including a four-floor block totaling 125,000 square feet.
Capital improvements to the property were completed in the past several years at a total cost of about $25 million, Pacinelli said. The upgrades targeted the conference center, main building lobby and common areas, and included a new roof deck.
Roughly 900,000 square feet of office space is available in Washington's West End submarket, a high-end area that includes the Watergate. Annual rent growth in the West End is forecast to end 2026 at negative 0.3%, compared to the market average of negative 0.1%, according to CoStar's latest report, as the market continues to contend with an elevated vacancy rate and muted office-using job growth.
For the record
In addition to Pacinelli, Charlie Smiroldo and Lukas Stanat with Stream Realty Partners represented Jetset in the acquisition, while JLL represented the seller. Pacinelli said JLL's team included Kevin Byrd and Stephen Conley.
Stream is set to continue serving as the exclusive leasing representative and property management company for the property. The leasing team is led by Pacinelli, along with Tim McCarty, John Klinke and Josh McDonald.