Dispositions and Assets Held for Sale

3 Months Ended

Mar. 31, 2022

Dispositions And Assets Held for Sale

Dispositions and Assets Held for Sale

3.Dispositions and Assets Held for Sale

Dispositions

The following is a summary of the disposition activity for the three months ended March 31, 2022:

								Loss on
				Gross		Cash		the Sale
				Sales		Proceeds		of Real
Date Disposed	Assets	Segment	Location	Price		from Sale		Estate
March 28, 2022	Development Parcel	Other	Arlington, Virginia	$	3,250	$	3,149	$	(136)

During the three months ended March 31, 2022, one of our unconsolidated real estate ventures disposed of several assets. See Note 4 for additional information.

On April 1, 2022, we sold the Universal Buildings, commercial assets located in Washington D.C., for a gross sales price of $228.0 million, which were classified as assets held for sale as of March 31, 2022.

On April 13, 2022, we formed an unconsolidated real estate venture with affiliates of Fortress Investment Group LLC ("Fortress") to recapitalize a 1.6 million square foot office portfolio and land parcels for a gross sales price of $580.0 million comprising four wholly owned commercial assets (7200 Wisconsin Avenue, 1730 M Street, RTC-West/RTC-West Trophy Office/RTC-West Land ("RTC-West") and Courthouse Plaza 1 and 2), which were classified as assets held for sale as of March 31, 2022. Fortress contributed $131.0 million for a 66.5% interest in the venture. In connection with the transaction, the real estate venture obtained mortgage loans totaling $458.0 million secured by the properties, of which $402.0 million was drawn at closing. We will provide asset management, property management and leasing services to the venture. Because our interest in the venture is subordinated to a 15% preferred return to Fortress, we do not anticipate receiving any near-term cash flow distributions from it.

Assets Held for Sale

The following is a summary of assets held for sale:

						Liabilities Related
			Total	Assets Held		to Assets Held
Assets	Segment	Location	Square Feet	for Sale (1)		for Sale (2)
			(In thousands)
March 31, 2022
Pen Place (3)	Other	Arlington, Virginia	2,082	$	73,876	$	298
Universal Buildings (4)	Commercial	Washington, D.C.	659		168,599		15,854
7200 Wisconsin Avenue (4)	Commercial	Bethesda, Maryland	271		113,471		1,471
1730 M Street (4)	Commercial	Washington, D.C.	205		77,284		89,515
RTC-West (4) (5)	Commercial / Other	Reston, Virginia	1,835		191,774		121,206
Courthouse Plaza 1 and 2 (4)	Commercial	Arlington, Virginia	633		266,746		139,662
			5,685	$	891,750	$	368,006
December 31, 2021
Pen Place (3)	Other	Arlington, Virginia	2,082	$	73,876	$	—

(1) Includes $180.5 million of finance lease right-of-use assets related to ground leases at 1730 M Street and Courthouse Plaza 1 and 2. The remaining assets primarily represent the carrying value of real estate.

(2) Includes $164.8 million of mortgages payable related to 1730 M Street and RTC-West, which were repaid in April 2022, and $163.5 million of liabilities related to finance lease right-of-use assets related to 1730 M Street and Courthouse Plaza 1 and 2.

(3) Under contract for sale to Amazon for $198.0 million, which we expect to close during the second quarter of 2022. Total square feet represent estimated or approved potential development density.

(4) These assets were disposed of or recapitalized in April 2022.

(5) Total square feet include 1.4 million square feet of estimated potential development density.