WASHINGTON, DC—As we reported yesterday, the Meridian Group closed on the purchase of 800 K and 801 Eye St., NW, from JBG Cos. When GlobeSt.com first got wind of the deal in February, we were told the buildings were trading for $315 million. The company is declining to discuss pricing but that number has been cited in recent days.

The company plans to reposition the buildings, per it usual approach to acquisitions. "These are Class B buildings in a Class A plus location. We think they are ripe for repositioning," Gary Block, managing director of The Meridian Group, tells GlobeSt.com.

"In general we like to purchase assets that are well located, are near a metro or highway interchange with easy access," he adds. "We also look for assets that are in a mixed-use environment with residential and retail and office uses as opposed to a stand-alone office building." These two buildings-as well as the company's noteworthy acquisition of SAIC's headquarters last summer-fit that criteria, he says.

There is one more criteria the company has for a good buy, Block adds: the properties have to trade at below replacement costs. This may seem obvious, but Block notes that several trades in DC's core have traded over this benchmark.

The TechWorld complex, he notes, would call for a replacement cost of north of $800 per square foot. "Our purchase price is approximately a 50% discount to its replacement cost," Block says.

The company to continue on this path but as pricing continues to heat up in the District, Block has his doubts. "Whether we can continue to buy on a below replacement cost basis will be on a case by case basis in the future, I suspect."