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WASHINGTON, DC-The Paramount Group has acquired the 387,200-sf Chester A. Arthur Building for $135.5 million. The property, according to District real estate records, has a current assessed value of approximately $68.6 million.

With the guidance of Ken Marks, Gerry Trainor and Donald McCully of Transwestern Commercial Services’ Washington, DC Investment Services Group, Circle Office Associates LLC turned the deed to 425 I St. NW in exchange for what amounted to nearly $350 per sf. Situated just blocks from the MCI Center in the District’s East End submarket, the site was developed in 1973.

The seven-story structure, which is further enhanced by a dual-level underground parking facility, is fully occupied, with the General Services Administration leasing 99.3% of the property for the US Department of Homeland Security’s Bureau of Immigration and Customs Enforcement headquarters. The organization has called 425 I St. home for the last three decades, and is occupying the space under a lease that is scheduled to expire in March of next year. If the GSA decides against renewal, new tenants could end up paying one of the heftiest leasing rates in the city; according to Cushman & Wakefield’s First Quarter 2005 Office Overview report, the average rental rate in the East End is $50.54 per-sf, the highest average rental rate of the District’s six submarkets.

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