Donald Trump may have promised to “drain the swamp” in Washington, but the number crunchers at Singapore’s sovereign wealth fund are willing to make a $1 billion bet that there will be more lobbying business and strategic advisors crowding around the US capital over the next few years.
GIC, which invests Singapore’s government reserves, is purchasing office space valued at more than $1.05 billion in and around DC, according to an announcement today by the fund. The Singaporean investment powerhouse is making the acquisitions through a set of recently formed joint ventures with a group of investors, including affiliates of US real estate developer Beacon Capital Partners.
The deal with Beacon gives GIC majority ownership in over 2.1 million square feet (195,000 square metres) of office space in three projects in the capital and in nearby Arlington, Virginia. “These acquisitions will strengthen our portfolio of high-quality office assets in the US and enable us to invest in scale in the Washington D.C. market, one of the leading gateway cities of the US,” said Adam Gallistel, Regional Head of Americas for GIC. No financial details were made available regarding the transactions.
Buying Properties in DC and Arlington
Under one agreement, GIC is acquiring a pair of properties, including the 789,000 square foot Lafayette Center. The grade A, LEED Silver complex of three multi-tenant buildings on 21st Street NW is less than 15 minutes drive from Capitol Hill.
In the same deal, the fund is also purchasing Pentagon Center, a 912,000 square foot two-building complex in Arlington’s Crystal City area, which is adjacent to the Pentagon and Reagan National Airport. Pentagon Center is said to be fully-leased on a long-term basis to America’s General Services Administration. An affiliate of Beacon Capital Partners will continue to manage the buildings.
In addition to the deal for Lafayette Center and the Pentagon Center, GIC reached a separate agreement to invest in Terrell Place, a 426,000 square foot grade A office complex built around a former Hecht’s department store on E Street between 6th and 7th Street in the district’s Penn Quarter. That investment is being made alongside an existing Beacon-sponsored fund.
Trump Debut Fuels Lobbying Boom
After the number of registered lobbyists fell from 14,822 in 2007 to 11,143 in 2016, demand for office space around DC had slackened. However, things seem to be changing under the new administration.
“You are going to see spending up this year,” said Paul Miller, president of lobbyist industry group, the National Institute for Lobbying & Ethics recently told thehill.com. Miller, indicated that his “pace has been frenetic” in the early days of the Trump presidency.
GIC Buys $2 Bil in US Office Space in 2017
For GIC, the DC transaction follows just one month after it committed more than $1 billion to office property in New York. The fund agreed to purchase a 95 percent stake in 60 Wall Street in Manhattan during January.
In August 2016, GIC paid $2 billion for a 71 percent stake in Denver-based trailer park operator Yes! Communities, bringing GIC’s expenditures on US real estate to around $4 billion in less than one year.