Federal Capital Partners® (FCP) is pleased to announce the sale of 4040 N. Fairfax Drive in Ballston to a joint venture between Lionstone Investments and Penzance, who also holds an option to acquire the adjacent property located at 4000 N. Fairfax Drive. The sale of the ten-story, 182,832 square foot office building will generate gross proceeds of $56.2 million to FCP Fund II. The McMullin Revocable Family Trust, FCP’s partner and the prior owner of 4040 N. Fairfax, has retained control of density rights which will be sold separately to the Lionstone-Penzance venture in connection with the venture’s development plans incorporating the adjacent site.
“This transaction is a true win-win for no less than four different groups,” said FCP Managing Partner, Tom Carr. “The Lionstone-Penzance venture can pursue an exciting, new development project, Marymount University has obtained great new, additional educational facilities, the McMullin Revocable Family Trust has maintained their equity position, and FCP has accomplished its investment objectives. 4040 N. Fairfax is now fully repositioned, having been converted from an asset that was vacated due to the Base Realignment and Closure Initiative (BRAC) to a modernized office property with top class systems and amenities in one of the strongest submarkets in the Washington area.”
FCP entered into a partnership with the McMullin Family on 4040 N. Fairfax in July 2012 with a preferred equity investment, shortly before the loan expiration and departure of the building’s major federal tenant in December of that year. Since then, the partnership has fully renovated the building and entered into leases with Marymount University and Virginia Heritage (now Eagle) Bank. Negotiations with Lionstone and Penzance were facilitated by an innovative trust structure designed by law firm McGuire Woods that separated the building from its additional density rights.
4040 N. Fairfax is centrally positioned in the center of the vibrant Ballston submarket, two blocks from the Ballston Metro station, three blocks from the Virginia Square Metro station and one half mile to direct access to I-66. Dozens of restaurants and retail shops are within steps of the building.
FCP wishes to thank Avison Young, especially Rob Walters, Mike Shuler, Nate Krill, and Soph Chinoy for their able office leasing representation; Amy Hewitt for her team’s property management services on behalf of Avison & Young; Bill Dickinson and Jason Yanushonis for their ground floor retail leasing efforts; Wells Fargo for their active support of FCP’s investment and Bill Collins and Jud Ryan of Cassidy Turley, who, in their representation of the buyer, played an instrumental role in bringing the transaction to a successful conclusion.
About Federal Capital Partners
Federal Capital Partners (FCP) is a privately held real estate investment company that has invested in or financed more than $4.0 billion in assets since its founding in 1999. FCP is seeking equity, preferred equity and mezzanine debt investments in commercial and residential real estate throughout the Mid-Atlantic region, including Washington DC, Maryland, Pennsylvania, Virginia, Delaware, West Virginia, New Jersey and the Carolinas. FCP buys assets directly as well as through joint ventures with local operating partners. The firm, based in Chevy Chase, MD, owns and manages in excess of $2.3 billion in assets. FCP is currently investing its second investment fund, a $529 million commingled, discretionary fund closed in 2012. For further information on FCP, please visit www.fcpdc.com