WASHINGTON, DC-An office building in the heart to the District’sCBD has traded for $82.4 million. TF Cornerstone has acquired 2121K St., NW from ING Clarion Partners, free and clear of debt. HFF’sJim Meisel, Dek Potts and Andrew Weir represented the seller.

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The building was among a handful of K Street offices to addfloors to its structure during the halcyon days of the mid 2000s.Those renovations were completed in 2007, delivering to the marketa 11-story, 190,458-square-foot property with ground-level retailand a 132-space underground parking garage.

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The building went to market with only 50% occupancy, however -which would have been an issue in 2009, Potts tells GlobeSt.com."When we went out to market we weren’t sure how it would react tothe vacancies. But this was one of the first assets marketed in2010 where the investors were willing to underwrite and give valueto the vacancies." As it turned out, he says, bidders came to theconclusion that the building will lease up within the next 12 to 24months at attractive rates. In large part that is dueto the K Street address, he says, which still holds tremendousvalue in the market. Indeed, the response was significant, with theproperty receiving just under 20 qualified bids.

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As part of the transaction, the buyer and seller agreed that TFCornerstone would take on the costs - the TIs and commissions- of the upcoming leases. Two tenants have recently signedon, bringing the occupancy to 71% once they move in. These areEconomists Incorporated and a retail lease with celebrity chefBobby Flay, for his new culinary concept, Bobby’s Burger Palace.That still leaves a 29% vacancy rate for the building. One marketsource estimates that TF Conerstone will spend about $60 per squarefoot over the next few years stabilizing the rest of thebuilding.

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In the category of separate news but on the same street:Somerset Partners inked a 15-year lease with KPMG for 83,000 squarefeet at 600,000-square-foot 1801 K St., another building on theblock that has undergone renovations - in this case a completerenovation designed by Skidmore, Owings and Merrill. KPMG isrelocating from its 2001 M St. office, where it has been locatedfor the past 22 years. KPMG will occupy a double height mezzaninewhere it will construct a state-of-the-art conference facility.Somerset Partners was represented in the transaction by DavidBevirt, Tom Golsen and Carroll Cavanaugh of Jones Lang LaSalle;Gregory Knoop of Somerset Partners represented ownership; and KPMGwas represented by Phil Leibow, Chris Bynum and Alex Lassar ofJones Lang LaSalle.

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