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WASHINGTON, DC-The towering 235,000-sf building at 1275 K St. has gotten a new owner as Lerner Enterprises and Guggenheim Partners-Real Estate Group got together to acquire the class A office property in a recent transaction. Financial terms of the purchase are unavailable; however, District records indicate that the property has an assessed value of approximately $56.6 million. Recent sales of comparable properties near 1275 K St. include the 253,000-sf building at 810 7th St., which sold for $75 million. Cassidy & Pinkard Inc. marketed the 12-story structure on behalf of the seller, the JBG Cos., which acquired the property in 1999 for $43.4 million, making it the tenth largest office sale in the District for that year.

Located in the city’s East End area within walking distance of such landmarks as the White House, the new Washington Convention Center, and the Washington Post, 1275 K St. holds a strategic corner spot on a .5-acre parcel. The 21-year-old structure features 14,0000 sf of street-level retail space, and three below-grade levels offering office space, 761 sf of storage space and two levels of parking space to accommodate up to 155 vehicles. Speaking to GlobeSt.com, Lerner’s Michael S. Hillman explains that the property was of great interest to Lerner because “it provided solid initial core-plus returns with potential future rent growth based on recent lobby and exterior renovations, and current development toward the east.” The development he speaks of includes the bevy of structures that are popping up around the recently erected 2.3 million-sf Washington Convention Center.

The current average asking rate for class A properties in the District is approximately $41 per-sf. Occupancy levels at 1275 K St. presently hover around 86%, and asking rent prices for relet space range from $30 to $31 per-sf, according to the building’s leasing agency West Lane & Schlager, which will continue to handle leasing activity for the new owner. Tenants at 1275 K St. include The Pension Benefit Guaranty Corp., which holds a lease on 33,000 sf through November 2008, and Cable & Wireless Inc., which has a lease on 21,700 sf until February 2011.

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