Situated in the Golden Triangle area of the city's CentralBusiness District, 1801 K was developed in 1971 and rises up 12stories toward the sky. The building could be considered a class B+property because of its age and the fact that 200,000 sf of spacewill be up for expiration in the next four years, but its stellarlocation and the presently sizzling market helped allow it tocommand the approximately $320 per sf in the transaction.

"The price is reflective of the demand for office buildingsdowntown," Advantis Real Estate Services Co. director of researchDavid J. Masters tells According to Advantis'sSeptember 2003 update of its DC Office Market Monthly Survey,office space in Washington, DC's CBD is currently at a low 5.9%,with only about 530,000 sf scheduled to deliver in the area for theentire year. At the time of the deal, 1801 K was 92% leased to 28tenants including law firm Robins, Kaplan, Miller & Ciresi,Potomac Capital Investment Corp, and real estate services companyCushman & Wakefield, which leased 17,000 sf in the building in1998.

"Given the building's strong tenant roster, and the attractiverates in-place when we purchased it, the asset will produce goodcurrent cash flow," explains Starwood Capital Group senior managingdirector Rick Kleeman. "Additionally, we believe that the Districtwill remain a healthy market over the next several years, and 1801K Street is well-positioned to attract new tenants as existingleases in the building roll over." The structure has always been ahot item on the market; it brought in $140 million when a jointventure involving Apollo Real Estate Advisors and Louis DreyfusProperty Group sold it to TIAA-CREF in 2000, making it one of thetop sales in the district for the year.

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