BG SMITH (NYSE: JBGS), a leading owner and developer of high-quality, mixed-use properties in the Washington, DC market, entered into a definitive agreement with affiliates of Fortress Investment Group LLC (“Fortress”) to form a joint venture to recapitalize a 1.6 million square foot portfolio of seven office buildings owned by JBG SMITH valued at $580 million.
The portfolio includes 7200 Wisconsin Avenue in Bethesda, MD, 1730 M Street in Washington, DC, RTC West I, II and III in Reston, VA, and Courthouse Plaza I and II in Arlington, VA. The properties are all located in amenity-rich, metro-served locations across the Washington, DC region. The transaction is expected to close in the first half of this year, subject to financing and customary closing conditions.
“In 2021, we announced plans to sell at least $1.5 billion of non-core office and land assets, primarily outside National Landing, to deleverage our balance sheet and provide capacity for multifamily development and acquisition opportunities and share repurchases,” said George Xanders, JBG SMITH Chief Investment Officer. “This partnership with Fortress, a top-tier investment management firm, accelerates our capital recycling initiatives and advances our planned portfolio shift to majority multifamily, with an office concentration in National Landing.”
“We are honored to partner with JBG SMITH to accelerate the firm’s strategic transition and cement its position as a leading owner and developer of sustainable, amenity-rich, mixed-use properties in the DC market,” said Fortress Managing Director Apostolos Peristeris. “With JBG SMITH’s deep expertise and the strong competitive position of these office buildings, we see significant opportunity for profitable growth across this portfolio in the years ahead.”
Eastdil Secured served as exclusive advisor to JBG SMITH in the transaction.