The $1,000 barrier has been broken: For the first time in
history, a D.C. office building has sold for more than a grand a square foot.
TIAA-CREF and Norges Bank Investment Management paid $392
million, or $1,075 a square foot, to buy PNC Place at 800 17th St. NW near
Farragut Square. The sale was announced in a press release Monday; the price
was recorded in D.C. land records.
The record for a Class A or trophy building is a huge
symbolic shot in the arm for D.C.'s investment sales market, which has flirted
with the milestone for years. Wells Real Estate Investment Trust set the last
record with its acquisition of the two-building Market Square for about $905
per square foot in 2011. In February, Morgan Stanley's Prime Property Fund paid
$948 a square foot for a 64.1 percent stake in 801 17th St. NW, right across
the street from PNC Place.
Pittsburgh-based PNC Financial Services Group and
Vornado/Charles E. Smith developed the 364,500-square-foot PNC regional
headquarters in 2010. The building — also home to Holland & Knight,
Analysis Group and Haynes & Boone — achieved LEED Platinum designation, the
highest possible, from the U.S. Green Building Council.
The sale appears to be the first partnership between
TIAA-CREF and Norges in D.C. Both have been working to expand their presence in
Washington's office market but independent of each other. Norges teamed up with
MetLife nearly a year ago to buy the Thurman Arnold building at 555 12th St. NW
for about $505 million and is gearing up on a renovation and rebranding of that
property. TIAA-CREF, meanwhile, has had a pretty health appetite for D.C. real
estate and set a its own record earlier this year with its acquisition of The
Woodley for $195 million, or about $920,000 per unit.
Holliday Fenoglio Fowler marketed the property for sale
on behalf of PNC. The HFF team was led by Executive Managing Directors John
Pelusi and Stephen Conley along with Andrew Weir, Jim Meisel, Dek Potts, Matt
Nicholson and Dave Baker.
Source: Washington
Business Journal
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