Aggregate pays $58M for a 94%-leased Virginia portfolio

Clarke-Hook Corporation has sold an 11-building industrial and retail portfolio in Northern Virginia to Aggregate Real Estate Investors for $58 million, Commercial Observer reported. The Fairfax-based buyer, which focuses on open-air retail and industrial assets throughout the Mid-Atlantic, gets 320,000 square feet across four business complexes in Fairfax and Loudoun counties that was 94 percent leased to more than 90 tenants at the time of the transaction. That works out to roughly $181 a square foot, making it an income trade rather than a conversion play: the value sits in the existing rent roll, not in what the land could become.

The tenant mix runs from retailers, restaurants and service providers to manufacturers, logistics companies and automotive-related businesses, the granular, cash-flowing base of the region’s service economy. West Fairfax Commerce Center, the largest asset, is a six-building industrial complex of about 150,000 square feet at 14506 Lee Road in Fairfax. The portfolio also includes University Commerce Center in Ashburn, three buildings totaling approximately 106,000 square feet of retail and commercial office space, and Dulles Trade Center in Sterling, a 40,529-square-foot property near Washington Dulles International Airport occupied by third-party logistics tenants. McLean Commerce Center, a 17,200-square-foot building on Chain Bridge Road leased to local service businesses, rounds out the book.

Greg Jacobsen, managing principal at Aggregate, said the properties are "substantially leased by stable, creditworthy tenants" and give the firm "a strong foundation for long-term ownership" with room to create additional value. Aggregate plans aesthetic upgrades and new management initiatives across the portfolio and is targeting more value-add deals in the region.

Northern Virginia’s louder capital story is data-center demand, as this publication has argued. This deal is the counter-programming, and it clears because the current cash flow is already there. The next test is whether the upgrades and tighter management can lift rents from a 94-percent-occupied, 90-plus-tenant base without waiting on a data-center lease.