CRYSTAL CITY, VA-One and Two Potomac Yard have traded forroughly a quarter of a billion dollars. USAA Real Estate Co.acquired the trophy office project, located at 2733 and 2777 SouthCrystal Dr., from institutional investors advised by J.P. MorganAsset Management.

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CBRE’s Bill Prutting, Jr., William E. Kaye, Randall Heilig,Jonathan Hull, Nick Hendy, Tim Hutchens, Tim Lenahan, ErikMcLaughlin and Malcolm Schweiker helped broker the sale of the622,000 square foot complex.

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It was an all-cash purchase, one of many cash offers the companyreceived, Prutting tells GlobeSt.com. “The composition of thebidders included domestic and overseas companies.” Pricing, hesays, was very competitive and the seller received an aggregate of$3 billion in offers.

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Besides a notable transaction for the area, CBRE says it is thesecond largest for 2010 following Two Constitution Square’s tradeof $305 million, the deal is a very positive one for the CrystalCity submarket, which up until a few years was worrying how itwould survive the changes brought about by BRAC.

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That concern has since been muted, Prutting says, especially asthe market has since rebounded to single digit vacancies. “There isa belief that the tenancy in Crystal City is becoming morediversified and supplemented by the private sector.”

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Ironically, Potomac Yard is largely occupied by governmenttenants, but Prutting notes they are both agencies that decampedfrom the District to nearby Crystal City – another strength of thesubmarket.

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At the same time, the resulting yield on the transaction iscompetitive with sales in Washington’s Downtown, Prutting says,which he places in the range of “the 6's.”

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Potomac Yard is 99% leased, anchored by the United StatesEnvironmental Projection Agency, which occupies 75% of the project.It was constructed in 2006 and is LEED-Gold certified.

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CBRE says the sale is the largest suburban transaction, thesecond largest transaction for the area, and the only trophy officeacquisition in Arlington County this year.

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The Washington, DC-area has seen a handful of high-pricedtrades, although most have occurred in the District. The largesthas been NoMa submarket’s arguable crown jewel, Two ConstitutionSquare, which traded for $305 million this summer.StonebridgeCarras and Walton Street Capital sold the 589,000-squarefoot office to Northwestern Mutual.

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Paramount Groupacquired 1899 Pennsylvania Ave. for $812 per squarefoot, or $151.1 million. Prior to that deal, TIAA-CREF acquired the227,000-square-footEvening Star Building from KamAm partnership for closeto $180 million.

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