Downtown Office Building Activity

The latest roundup of commercial sales activity in the DowntownDC BID area:

Paramount Group Inc. out of New York bought the Commercial National Bank Building (700 14th Street) from Tishman Speyer for $183 million, or about $813 per square foot (SF)—making this deal the biggest sale of the summer in the BID area. The 225,000 SF, limestone building is leased to Skadden, Arps, Slate, Meagher & Flom LLP, which recently signed a 15-year lease renewal at 700 14th Street and the two adjacent buildings (for a total of more than 400,000 SF). Thus, this prestigious law firm will remain in Downtown until 2028.

Meanwhile, Atlanta-based Jamestown Properties is on a roll when it comes to staking a claim in the BID area. The company recently purchased One Metro Center (700 12th Street), which sits atop Macy’s (1201 G Street), from Clarion Partners for $307.5 million, or $730 SF. Jamestown Properties now owns five office buildings in DC, three in the BID area, occupying a total of 689,000 SF. The others are:

• 733 10th Street, the 10-story, LEED-certified building developed by Skanska USA Commercial Development Inc. and sold to Jamestown Properties for $140 million, or $817 per SF, last year.
• The Madison Office Building (1177 15th Street), the nine-story building physically connected to the Madison Hotel and purchased more than two years ago.

Built in 2003, Metro Center is fully leased and conveniently located near all of Metro’s rail lines at the Metro Center station and just two blocks from the mega CityCenterDC complex. While Clarion sold the 415,326 SF, trophy building, its presence is still felt in Downtown:

• In the spring, Clarion acquired the Portrait Building (701 8th Street), an eight-story, Class A office building, for $98.5 million, or $730 per SF.
• Over the summer, it received $110.2 million in financing for the Washington Building (1440 New York Avenue) after securing a      15-year lease with Skadden, Arps, Slate, Meagher & Flom LLP, an anchor tenant.

Additional Sales Activity

Also, in July, Boston Properties announced a deal to sell 1301 New York Avenue to an undisclosed buyer for $135 million, or about $716 per SF. They buyer turned out to be Nakash Holdings LLC, an affiliate of the Nakash family that owns Jordache Enterprises. The 12-story building is leased by the U.S. Department of Justice (600 E Street), which has a long-term lease through 2029. By the way, Nakash Holdings also bought the Bond Building (1400 New York Avenue) for $102.8 million in March and is looking for other DC treasures.

And, finally, could another hotel be coming to McPherson Square?  If Atlanta-based Songy HighRoads LLC has its way. The company reportedly purchased 1522 K Street for around $23.5 million (less than an earlier sell in 2008) from an affiliate of the Retirement Systems of the City of Detroit over the summer. Now it’s weighing whether to convert the 11-story building into a 160-room, limited-service hotel or retain the 91,000 SF office building status. A decision is expected this month.

(This article was updated on Tuesday, Sept. 17)