Union Labor Life Insurance Co. and its parent, ULLICO Inc., want to move their headquarters to a new building they plan to build in downtown Washington.
The union-owned insurance company said it is in negotiations over an empty tract of land near the White House and around the corner from the headquarters of the AFL-CIO.
The land, which has been known over the years as either 1615 or 1625 I St. NW, now is owned by a partnership affiliated with Lawrence Ruben Co., a New York development firm.
ULLICO and its subsidiaries now have their headquarters at 111 Massachusetts Ave. NW, which would be put up for sale. The eight-story black building, built for ULLICO in 1983 and sometimes called the Darth Vader building, is lit up every December with one of the District's most prominent displays of Christmas lights.
"Recent years have seen the expansion of our operations to the point where we need additional space for future growth, and we are particularly pleased by the excellent location in the central business district, which will place us near the AFL-CIO headquarters," Robert Georgine, chairman and chief executive of ULLICO, said in a statement.
The life insurance company intends to build a 12-story, 400,000-square-foot building on the site to house its 450 employees. ULLICO and its subsidiaries would occupy about half the building, with the rest rented out to other tenants. The building would be developed by Trammell Crow Co.
ULLICO did not put a price tag on the deal, but the building and land would likely cost more than $120 million based on other recent real estate prices.
Ruben bought the land in 1996 from a partnership headed by Kajima Corp. of Japan. Although no price has ever been publicly announced, real estate sources say Ruben spent about $15 million for the land, or about $40 per developable square foot. Downtown land prices are beginning to push toward $100 per developable square foot. Richard Ruben, who has handled his family's Washington investments, did not return telephone calls seeking comment.
While both the New York developer and the Japanese before that had plans for major office buildings on the site, neither was able to attract a large enough anchor tenant to begin construction.
Both Ruben and Kajima hired prominent architects to design their never-built buildings: first Washington's Hartman-Cox, then Chicago's Skidmore, Owings & Merrill. A ULLICO spokesman said it's too early yet for his company to know whether it will proceed with one of those designs or commission another one.
Smith to Buy Fla. Complex
Charles E. Smith Residential Realty Inc., the Arlington apartment-building owner, last week agreed to buy a 1,339-unit waterfront apartment complex in Miami Beach's trendy South Beach neighborhood for $85 million.
The seller was a private company that will merge into Smith. The purchase will be paid for with a combination of common stock, debt assumption and the proceeds from the sale of convertible preferred stock.
Separately, Smith announced last week that it will raise $100 million in equity through the private-placement sale of convertible preferred stock. GE Capital will buy $90 million of that preferred stock.
The stock market has been extremely cold toward real estate shares for the last 18 months, making it all but impossible for Smith and other companies to raise equity by selling stock in public offerings.
The Miami Beach purchase is part of the company's strategy of buying and building urban high-rise apartments, the kind of buildings that are at the core of its Washington area holdings. It also has urban buildings in Boston, Chicago and Fort Lauderdale.
"South Beach is a dynamic 24-hour city and one of the country's most dramatic examples of successful urban revitalization," said Ernest Gerardi, president of Smith Residential. "This property is one of the few waterfront multifamily rental properties on South Beach, and through renovation and upgrading we will reposition it to increase its appeal to our target market -- urban lifestyle renters."
The complex, Forte Towers, is not actually on the beach, although it's in roller-blading distance. It faces Biscayne Bay, the body of water that separates Miami and Miami Beach.
Tokyo Tops Rental Costs
Office costs throughout this region have been climbing in the last two years, but they seem like a bargain compared with costs in some other cities.
The world's most expensive office location is downtown Tokyo, where top-of-the-line Class A office space costs $128.40 per square foot for rent, taxes and operating expenses, according to a new survey by Richard Ellis St. Quintin, a British subsidiary of Insignia Financial Group Inc.
London's West End ranked second at $118.57 per square foot, with London's City neighborhood No. 3 at $103.35 and Hong Kong No. 4 at $97.34.
The most expensive U.S. location, midtown Manhattan, ranked No. 5 at $88.24 per square foot. The only other U.S. cities to make the Top 10 were Los Angeles and San Francisco, tied for No. 10 at $55.81 per square foot apiece.
No. 14 Washington was the next U.S. city in the rankings, at $51.70 per square foot.
Other U.S. locations in the top 25 were Boston (No. 15, $51.29), Chicago (No. 18, $46.57) and Silicon Valley (No. 24, $40.70).