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WASHINGTON, DC-The DC investment market took a turn eastward when a domestic US partnership of real estate investors bought the Chester A. Arthur building at 425 Eye St. NW. Transwestern Investment Co. sold the seven-story, 385,000-sf building to Circle Office Associates Partnership. At $63 million, the price was more than $163 per sf.

The building is entirely occupied by the US Immigration & Naturalization Service. Earlier this year, the US General Services Administration renewed its lease for another six years.

Transwestern bought the 17-year-old building three years ago from Heitman Properties, reportedly for $44 million. The $19 million difference suggests what three years and a GSA lease can mean in a reviving neighborhood.

“This market has taken years to come around, but it’s right where it should be right now,” says Ken Marks, one of the Transwestern brokers involved in the deal. Transwestern represented both sides in the transaction.

The address isn’t part of a mainstream market, but part of the North of Massachusetts Avenue, or NOMA area. City officials are encouraging development there, trying to capitalize upon growing real estate interest in the area.

“They want it to be a tech corridor,” says Nathan Isikoff, also a Transwestern broker in the deal.

The transaction was structured as a Section 1031 exchange and involves another unidentified property owned by Circle.

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