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

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

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 to the vacancies. But this was one of the first assets marketed in 2010 where the investors were willing to underwrite and give value to the vacancies." As it turned out, he says, bidders came to the conclusion that the building will lease up within the next 12 to 24 months at attractive rates.  In large part  that is due to the K Street address, he says, which still holds tremendous value in the market. Indeed, the response was significant, with the property receiving just under 20 qualified bids.

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

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