WASHINGTON, DC-Clarion Partners has secured a $110.2 million loan for The Washington Building, a 213,896-square-foot class A office property in the District. SunTrust is providing the funding for Clarion, which owns the building on behalf of a pension fund client. CBRE brokered the transaction.

The building's location, at 1440 New York Ave., NW, was, to state the obvious, a huge plus, CBRE's Joe Donato tells GlobeSt.com. "As always, there will continue to be market demand for high-quality assets in the city."

However this particular transaction is worth examining in closer detail, if only because the loan comes with some bells and whistles not often found on financial deals—features that could become even more rare if and when interest rates rise.

For starters this is a seven-year bank loan with an option to extend to 10-years, at a long-term rate of 3.5% approximately. It is also a full-term IO loan, which, as Donato notes, "some lenders are moving away from." The loan, he adds, was originally quoted as floating rate but it was swapped to a fixed rate. Also the length of the loan is a bit of an eye-brow raiser as most banks are seeking to limit terms to five to seven years. "Extension options are rare for on-book bank loans," Donato says.

At bottom, though, he says, this is more of a story about the property than what the lender was willing to do. Or rather, the former had much to do with the latter, as exhibited by the robust competition for the loan.

Also, the owner recently secured a long-term lease renewal with Skadden, Arps, Slate, Meagher & Flom LLP & Affiliates, which has occupied the space for the past twenty years, Donato noted. The building is currently 94% leased.