Offshore Buyer Expected to Take 1899 Penn for $813 Per SF

WASHINGTON, DC-There has been much speculation about the pending sale of 1899 Pennsylvania Ave., a 186,462-square-foot CBD office that Frankfurt-based KanAm Grund Kapitalanlagegesellschaft put on the market this summer. 

Here is some more: the building’s sale will close within two weeks, trading to an “offshore buyer” at approximately $813 per square foot, a source tells GlobeSt.com. That would be close to the asking price for the building, which Jones Lang LaSalle began marketing with an expectation of receiving $150 million, or roughly $820 per square foot. Designed by Leo A. Daly, the 11-story building is fully leased.

If the deal does close at that price point, it will be the second in the $800 per square foot range since the start of the credit crises. The other was also a KanAm property: the 227,000-square-foot Evening Star building, which traded close to $180 million.

These price points reflect buyers’ willingness to pay a premium for DC real estate, JLL’s John Kevill tells GlobeSt.com. Besides Kevill, Collins Ege, Jim Molloy and Sean McDermott are handling the transaction with support from Steve Collins. “Both foreign and domestic buyers are looking for core investments and are gravitating towards the DC market because of its inherent stability,” Kevill says.

And he may get another chance to see if this $800-per-square-foot trend will continue to hold. The company is going out on the market with Brookfield’s 1225 Connecticut Ave., which is fully-leased by the World Bank. “It could well exceed $850 per square foot,” Kevill tells GlobeSt.com. “We are hopeful it will get $900 per square foot, but right now we just starting with $850.”