The National Association of Attorneys General (NAAG) was founded in 1907 to help attorneys general fulfill the responsibilities of their office and to assist in the delivery of high-quality legal services to the states and territorial jurisdictions.
In 2015, NAAG owned 27,000 SF of office space within 2050 M Street, NW. The building was purchased by Tishman Speyer (Tishman), who was planning on tearing the building down and replacing it with a new, trophy-quality building. NAAG reached an agreement (prior to retaining WLS) to move out of the building into temporary space, and move back into the new building in 2020 and retain ownership of the 27,000 SF.
NAAG retained WLS to evaluate whether they should sell their building interest to Tishman and relocate into a lease at a different building or maintain ownership and move back into the new 2050 M Street.
WLS developed a long-term strategic real estate plan and completed an analysis of both scenarios. Although it was determined that NAAG was better off selling the 27,000 SF and leasing elsewhere, it only made sense if they could get a premium price from Tishman. Tishman initially offered $12 million for the space, and WLS was able to negotiate a sale price of almost $22 million, which made the decision to sell and relocate to a lease the most financially beneficial alternative. NAAG had come to the decision that they wanted to focus on their mission, and not on owning and managing real estate, so they accepted the terms and sold their space to Tishman.
Tishman initially offered $12 million for the space, and WLS was able to negotiate a sale price of almost $22 million
After a market wide search, WLS found NAAG the ideal new space at 1850 M Street which was just two blocks from 2050 M Street. NAAG was able to efficiently fit into just 22,000 SF, and WLS negotiated an extremely aggressive rent and concession package. Not only did NAAG benefit from the lease terms and reduction in space, but the future income derived from the investment of the sale proceeds would offset most of their annual rent. In addition, by selling their interest and relocating in 2017, they avoided the costs and disruption of two moves in three years had they relocated back to the new building.
When NAAG originally retained WLS, they were almost certain they would have to move back into the new building because they would not be able to sell it for the amount they needed to make relocation to a different building viable. WLS developed a very creative strategy that resulted in gaining the necessary leverage with Tishman to get them to pay the $22 million price. NAAG also retained WLS project management to manage the construction of their new space at 1850 M Street, NW.