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WASHINGTON, DC-A new East End building at 1099 New York Ave. has just traded for $90.5 Million or $517 per square foot. The building, owned by Tishman Speyer, is not part of the >$2.6 billion local portfolio that it acquired from Carr Properties and now is in trouble, according to a source.

Instead it has been on the market for a year looking for a buyer interested in a trophy acquisition, according to Eric Berkman with Grubb & Ellis. “The deal is a great sign that people are willing to buy on the upside of DC,” he tells GlobeSt.com. “It gives a huge boost to the theory that there is a recovery happening here now.”

Indeed, anecdotal evidence is stacking up that institutional funds are willing to pay for quality buildings here. Potomac Center North, an office building in the city’s SW quadrant, sold this summer to Invesco Real Estate. More notably, 1999 K traded fro $207.8 million, or $830 per square foot – the highest per square foot trade since the height of the market. Other recent sales include 570,038-square-foot Willow Oaks Corporate Center, which was acquired by KBS REIT II for $112 million and a Boston REIT’s acquisition of Georgetown North for $62 million.

Last month it was reported that Tishman Speyer had violated its covenants on $200 million in its revolving credit line on the 28-asset portfolio in DC. Since then it has announced it is working with its lenders for a modification and wants to make a tender offer to buy back a portion of the joint venture term loan and revolver debt, which totals approximately $570 million. The portfolio in question consists of 14 properties in the DC area and 7 in its suburban markets.

Credit Suisse Asset Management is the buyer, acquiring the 61% leased building at a 7.4% stabilized cap rate. Tishman Speyer began construction on the 11-story building in 2006, delivering it in April 2008. Its anchor tenant has been national law firm Jenner & Block LLP, which signed a 15-year lease for 86,000 square feet in the building as it went under developent. Designed by the architectural firm of Thomas Phifer and Partners, the building features a facade made of overlapping glass panels and a landscaped rooftop deck for client entertainment. Tishman Speyer did not return a call to GlobeSt.com in time for publication.

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