#United States #Washington, D.C. #Harbor Group International #1250 Eye Street #Kairos Investment

Harbor Group International Secures Senior Mortgage for Washington Office Building

Harbor Group International, LLC (HGI), a prominent player in real estate investment, has recently made significant waves by providing a senior loan amounting to $38.3 million to partner Kairos Investment Management Company. This financial backing is aimed specifically at refinancing and facilitating vital improvements for the 12-story office building located at 1250 Eye Street in Washington, D.C.'s bustling East End.

Financial Strategy Behind the Loan

The timely provision of this loan is not just about numbers; it is strategically designed to assist in refinancing existing debts, while also enabling ongoing renovations and enhancements to the property. The funding will allow Kairos to capitalize on various capital improvement programs that are essential for bolstering leasing activity within this prime commercial space. Given the building's prime location and its rich amenities, the decision reflects a rising optimism about the potential dynamics of the Class A office sector.

Acquired by Kairos in 2023, 1250 Eye Street stretches over a substantial 180,000 rentable square feet and is strategically positioned at the corner of 13th and I Streets. The building boasts unobstructed views of the impressive Franklin Park, known as the largest park in Washington, D.C. Furthermore, its design features clean window lines that allow for ample natural light, creating an inviting workspace.

Plans for Upgrades and Tenant Amenities

The financing enables Kairos to enhance the amenities within the building, including the development of a brand-new 12th-floor tenant amenity suite. This suite will feature an elevated hospitality lounge, a conference center, and a bar/kitchen area, all designed by the acclaimed architectural firm Gensler. In tandem with these luxurious spaces, the firm will also focus on upgrading existing areas such as the lobby, gym, bike room, and parking/valet services. Such improvements are expected to significantly elevate the appeal of the building to prospective tenants.

Since acquiring the property, Kairos has made commendable strides in leasing out a substantial segment of the office space, with further activity anticipated post-renovation. As highlighted by Michael Nathan, the Chief Investment Officer for HGI’s Office sector, the significant demand for well-amenitized properties in prime urban locations supports their financing strategy, aligning well with their aim to back high-quality sponsors.

Key Attractions and Strategic Location

The strategic location of 1250 Eye Street adds a layer of allure for potential tenants, being in close proximity to essential landmarks, including the White House and the U.S. Capitol. Additionally, the proximity to CityCenterDC, an upscale outdoor shopping center, and Capital One Arena further enhances its desirability, promising to attract a diverse range of tenants eager to capitalize on the dynamic urban environment.

“We are grateful for HGI’s support as our lender, as we reposition 1250 Eye Street to be a premier office destination within Washington, D.C.,” stated Jonathan Needell, President and Chief Investment Officer of Kairos Investment Management Company. He emphasized that this renovation is expected to inject new energy into the property, thereby magnifying its appeal to contemporary tenants and enhancing long-term value.

Conclusion

Harbor Group International's recent financial maneuver underscores a broader trend in real estate, where careful investment in office spaces with high potential can yield impressive returns. As they venture forward with enhancements that cater to today's workforce demands, both HGI and Kairos are poised to make a significant impact on the commercial real estate landscape in Washington, D.C. The future of 1250 Eye Street looks promising as it evolves into a hub of modern business activity, adapting to meet the requirements of a changing occupational ethos.