Aegis Asset Management Eases Vacancy Concerns for Washington DC Office in the US

Aegis Asset Management has alleviated concerns about office vacancies in Washington DC, USA.

According to the financial investment industry on the 15th, Aegis Asset Management and real estate developer Cap Properties, who jointly acquired the Midtown Center in Washington DC, recently signed a contract with the tenant, the U.S. mortgage guarantee company Fannie Mae, which includes extending the lease period and reducing the leased area.

The Midtown Center in Washington DC was completed in 2018, and Fannie Mae had a contract to use 82% of the building's leased area until May 2033.

In 2021, Aegis Asset Management and Cap Properties raised 250 billion KRW in funds to jointly acquire a 49% stake in the building. However, since the end of last year, Fannie Mae exercised an early termination option on the lease contract, raising concerns about vacancies. To reduce financial burdens, the lease expiration was moved forward to 2029.

Aegis Asset Management and Cap Properties extended the existing contract on the condition of reducing Fannie Mae's leased area. They also conducted negotiations to create conditions necessary for securing alternative tenants. As a result, Fannie Mae's leased area was reduced from the original 65,961.16㎡ to 31,587.03㎡. Instead, the lease contract expiration was extended to 2045.