WASHINGTON, DC—First Potomac has acquired The Tower Building, an office located at 1401 K St., NW, for $58 million.

The building is twelve stories and 117,093 square feet. It is one of the first art-deco office buildings in the city and included in the National Register of Historic Places. 1401 K St. is currently 88% leased to 22 tenants. Guardian Realty Investors is the seller.

The REIT picked up the property as part of its strategy of targeting high-quality office assets, says Nicholas R. Smith, the REIT's CIO, in a prepared statement. In addition, the building is located in the Downtown office market "….where we see the potential for long-term rental rate growth and value appreciation."

First Potomac plans to make several upgrades the building including renovations in the restrooms, the lobby, storefront, elevator cabs and fitness center. It acquired the property assuming a $37.3 million existing secured mortgage. The balance of the purchase price was funded through the REIT's revolving line of credit.

Mark Klug, Max Friedman and Abigail Todd from CBRE will represent First Potomac in the leasing of the property.

Last October First Potomac acquired Redland I, the third building at the Redland Corporate Center, for $30 million. The 133,895 square foot, class A office building is fully leased to the Department of Health and Human Services through early 2018.

First Potomac has recently sold, or is under contract to sell, two assets. One is Patrick Center in Frederick, MD, which the REIT hopes to close in the second quarter. It also sold a nine-building portfolio in Gaithersburg, MD, in a 1031 exchange with Finmarc last year.