The Alexandria Playbook: How a $1.65M Deal Locked in a 20-Year Tenant and a 7.9% Return

Published on March 16, 2026

Introduction

Every real estate investor hunts for the unicorn: the high-yield, low-risk asset in a market full of predators. But what if the secret wasn't finding the unicorn, but creating it? It's a constant search for an edge—a way to de-risk an asset while maximizing its potential through intelligent deal structuring.

This article breaks down a masterful commercial real estate deal for 1001 N. Fairfax Street in Alexandria, VA. It serves as a masterclass in savvy investing, demonstrating how to flawlessly combine a prime location, absolute tenant security, and guaranteed financial growth into a single, high-performing asset.

1. The Ultimate Low-Risk Tenant: Your Seller

The single most powerful feature of this deal is its creative and stabilizing structure. The story is more nuanced than a simple transaction: the original owner, Alphagraphics Printing, sold the property to a dental practice, Alexandria Dental Art P.C. The dental practice then invested $500,000 of its own capital to renovate its suite before executing a sale-leaseback with the current investor, immediately signing a 20-year lease to become the anchor tenant.

For the dental practice, this move was a strategic masterstroke: it converted their illiquid real estate asset into $1.65 million in working capital—money they could reinvest into growing their core business—while simultaneously locking in their prime location for the next two decades. For the buyer, the seller's massive upfront investment systematically de-risked the acquisition by removing tenant vacancy from the equation. The result is a guaranteed, stable, and financially invested anchor tenant from day one.

• Tenant 1 (The Seller): Alexandria Dental Art P.C. occupies the property under a 20-year lease with 3% annual rent increases.

• Tenant 2 (The Veteran): Alphagraphics Printing, a tenant at this location for over a decade, just renewed its lease for another 6 years with 2% annual rent increases.

With an ideal tenant structure providing a guaranteed income floor, the second pillar of the deal's genius comes into focus: its bet on the future of the entire region.

2. Investing in the Future: Proximity to Power and Play

Every investor knows the mantra: "Location, Location, Location." This property exemplifies the principle by not just being in a good location for today, but being strategically positioned at the epicenter of the region's future economic growth.

The property's location in Old Town Alexandria provides immediate access to major economic drivers, positioning it for significant long-term appreciation.

• Amazon's HQ2: The property is located only four miles from Amazon's second headquarters in Crystal City, a hub of high-paying jobs and ancillary development.

• Future Sports Arena: It is approximately one mile from the future Potomac Yard home of the NBA's Washington Wizards and the NHL's Washington Capitals.

• Washington D.C.: Its prime location is just across the river from the nation's capital, ensuring it remains in a high-demand, economically resilient corridor.

This ecosystem of growth does more than just promise future property appreciation; it ensures a durable customer base for the tenants. The influx of high-income professionals from Amazon and visitors for the sports complex creates a thriving local economy, making it more likely that both the dental practice and the printing company will flourish and renew their leases for years to come. This strategic positioning creates a powerful tailwind for long-term asset appreciation.

3. The Numbers Don't Lie: A 7.9% Return with Built-in Growth

A brilliant strategy and prime location are only as good as the financial returns they produce. In this deal, the numbers confirm the strength of the investment and showcase its built-in profitability.

From 7.3% to 7.9%: The Power of Contractual Growth

• Purchase Price: $1,650,000 on December 28, 2018.

• Initial Net Return: 7.3% at the time of purchase.

• Current Net Return: 7.9%, reflecting the contractual rent increases.

A Look Under the Hood: Deconstructing the 12.5% Gross Yield

• Printing Company Rent: $95,509 per year.

• Dental Clinic Rent: $117,629 per year.

• Total Gross Rent: $213,138 per year.

• Gross Annual Income Rate: 12.5%, a powerful top-line figure. After accounting for all property expenses, the investment delivers a net return of 7.9% today, a number contractually guaranteed to grow.

The financial architecture of this deal is its most elegant feature: the growth is not speculative, it's contractual. The annual rent escalations of 2% and 3% are written directly into the long-term leases. This means the property's income is guaranteed to increase year after year, delivering predictable and passive profit growth for the owner.

Conclusion

The 1001 N. Fairfax Street deal is a powerful example of intelligent and creative real estate investing. By looking beyond a conventional transaction, the buyer secured an asset with exceptional stability and a clear path to future growth. The three core lessons are simple but profound: secure a committed seller as a long-term tenant, invest in a location with a visible and promising future, and ensure the financial structure includes guaranteed, automatic growth.

This case study challenges us to think differently about acquisitions. How can you look beyond the surface of a deal to find creative structures and hidden value in your own real estate investments?