SunTrust Banks, Inc. has bought back its former property at 7500 Wisconsin Avenue, at the main crossroads of downtown Bethesda. While the site has continued to host an operating bank branch, the corporation sold the property for $5.5 million in January 2008. SunTrust is taking a loss on the deal in the short term, as it had to pay $9.3 million to reacquire it a few weeks ago.
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The property is within the upper left corner
of the lower red area indicated on this
map of heights near the Bethesda Metro
(via Montgomery County Planning Department) |
The long-term investment picture is considerably brighter for the Atlanta-based corporation. 7500 Wisconsin falls within the area targeted for 200-290' tall buildings under the Bethesda Downtown sector plan likely to be approved by the Montgomery County Council.
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Flatiron Building in
New York City
(via Google Maps) |
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7500 Wisconsin and adjacent
properties sit on a similar
triangular-shaped plot of
land at an urban crossroads |
While the building is an iconic one in downtown Bethesda, it could be part of a highly-lucrative assembly and redevelopment in the future. I'm thinking something like the landmark Flatiron Building in New York. If redevelopment isn't in mind, why else would they blow $9 million on this?
34 comments:
So it's not development-restricted based on historical value?
"SunTrust is taking a loss on the deal in the short term"
You have no idea what you just said.
The top of the building will have a wonderful sign saying, "Trump Tower Bethesda" .
Is that purchase price for just the small corner bank building? Any assemblage plans in the works?
@ 5:57 AM - Yes. You cannot lose money just by buying something. You only lose money if you sell something for less than what you originally paid for it.
"If redevelopment isn't in mind, why else would they blow $9 million on this?"
My guess is Suntrust signed a 10-year lease that was expiring in Jan. 2018. Suntrust was given an ultimatum to buy or GTFO and they chose to buy. I don't expect redevelopment anytime soon.
9:12 AM opportunity costs, my friend
12:00 PM It sounds like you're the one who needs to be locked up.
5:57: Apparently I'm better at math than you - in the short term before any future redevelopment, SunTrust has lost about $4 million on the transaction, moron.
9:12: They sold it for $5 million, and paid $9 M to reacquire it. They're out $4 million in the deal, knucklehead.
That makes absolutely no sense. They have whatever profit they made when they sold it for $5mm and a $9mm basis in a new investment. You can't call it a short-term loss just because you sold something and later bought it back for more than you sold it for. You certainly couldn't claim that as a loss on a tax return. If I sell a stock and then later repurchase it a higher price (my view on it changes, etc), I certainly don't have a loss.
Not sure how long they held that building before selling it at $5mm; but if it was a while they might be sitting on a cash profit having cleared a good deal on original sale and financing the repurchase with debt and equity.
"SunTrust is taking a loss on the deal in the short term, as it had to pay $9.3 million to reacquire it a few weeks ago."
As others have already stated, you cannot lose money on an asset that you do not hold. For all we know they could have achieved an 80% ROI investing the proceeds on the initial sale elsewhere.
"If redevelopment isn't in mind, why else would they blow $9 million on this?"
SunTrust Banks purchased the property for occupancy, not to redevelop it. It is highly unlikely that the site will be redeveloped in the near future. When redevelopment comes back into the picture, SunTrust will (again) sell the property to a sponsor.
6:46am opportunity costs, my friend
@7:39am (I'm 6:46am)
My point exactly.
I'll agree that I'm not an expert on the many tricks Wall Street can use to manipulate the $ystem and produce magic money. You'll have to turn to a Wall Street tool like Hans Riemer for that. Here in the real world of Main Street America, if you sell your home for $300,000 and buy it five years later for $700000, you're going to come out a loser in the short term.
Of course the bank isn't redeveloping in the near future - hence my use of the phrase short-term loss.
Pick, pick, pick - all this ridiculous criticism of every word and sentence in a perfectly acceptable and factual article. You know who else reported this major commercial real estate story? NOBODY. Is this competent coverage of local real estate? Absolutely. Is the local reader expecting a Louis Rukeyser 500 page tutorial on all the dirty tricks Wall Street could employ to turn $4 million into $5+ million since 2008? Hell, no.
@9:24 (I'm 6:46)
Someone sure can't take criticism well. It's basic accounting, not "Wall Street" tricks. No one is complaining about the story. We just pointed out an error.
SunTrust Banks is not "Main Street America," but the same principle still applies to individual consumers. Using your example, suppose I sell a house in DC for $300,000 and use the proceeds to buy a $300,000 in San Francisco. Then five years later I sell that condo for $800,000, and rebuy my house in DC for $700,000.
It's a shame that you treat those who comment on your article like total crap. Nobody was trolling you or calling you any names. In fact you were the one referring to people as "morons" and "knuckleheads."
Most real media outlets would have corrected the issue, thanked the person for and gone on with their life.
"perfectly acceptable and factual article"
The bulk of the article was factual, a couple statements were not, which is why they were pointed out.
"You know who else reported this major commercial real estate story? NOBODY."
That certainly is not true. I learned about this purchase from a media outlet since at least a week prior to your post, but it is irrelevant who posted what first.
By the way, how do you claim to be a Republican while harboring such a hatred of "Wall Street?"
Agreed
Once again Robert Dyer passes opinion without knowing the full story or bothering to ask before he posts. Obviously no one else here knows exactly the specifics, but there are other possibilities than what Robert Dyer thinks and often insists is the only possibility. #fact
Classic Saul Alinsky tactics. I stand by every sentence of the article. Your speculation about what SunTrust may have done is just that - speculation. It's also total BS that anybody reported this first - I did a Google search prior to publishing and found no prior report. Stop lying. Stop trying to invent things to "criticize" simply because you have some political or personal axe to grind.
Your comment "SunTrust is taking a loss on the deal in the short term" is speculation also. That's the point everyone has been trying to make for a while now. Only you don't see it. You see it as arguing against your opinions and perspecrives when there are potentially many more.
5:22: No, my noting their loss is a face value assessment that's as clear as the Bain Capital check in Hans Riemer's campaign account. They had to pay more to buy back a property that would have nearly doubled in appreciation had they simply held on to it. Whatever else they may have done with cash from selling it in 2008 is unknown, and is purely speculation.
"Wall Street" has become a dog-whistle for "Jews" among Republicans today. Just ask Eric Cantor.
5:54: Mitt Romney is Jewish? Jeb Bush, Ted Cruz, Hillary Clinton and Barack Obama are Jewish? Please try not to sound any less educated than you already have.
And Dyer still can't admit that he used the term "loss" incorrectly.
#DyerCanNeverEverAdmitHe'sWrong
"It's also total BS that anybody reported this first - I did a Google search prior to publishing and found no prior report. Stop lying."
Oh by the way, here's one of those sources. From the July 11 Montgomery Newsletter:
"The SunTrust Bank building smack dab in the center of Bethesda is back in SunTrust’s hands. According to the Land Records, the bank paid $9.35 million for 7500 Wisconsin Avenue..."
The only liar here would be you
7:24: You're talking about a private, subscription-only, insider b2b publication where developers try to outbrag each other anonymously. That's not a news source. There was no public report on this story until mine. Stop lying.
Agreed
Dyer sounds like a mad scientist on a Saturday morning cartoon show.
10:39: Aw, shucks - but, then, anybody sounds smart like a scientist if they're standing next to the County Council. "What year is it?!?!" "Westbard is within a mile of two Metro stations." "We're not tearing down garden apartments." "Just paint a bike lane on the next time you restripe all the roads, okay?"
Dyer has been breaking development news before the "Maryland newsletter" for awhile now. :)
County Schedule
March - discussion about a building for sale
April - meeting to talk about the possibility of buying
May - 2nd meeting to discuss if building should be bought
June - final meeting to approve or disapprove of buying building
July - Building purchase not approved.
Reveal to all that you actual already bought the building in February.
Forget to mention that all the meetings were a waste of time and money.
What's not to love about our council?
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You're obsessively stalking him and the Maryland newsletter.
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