WASHINGTON, D.C. — First Potomac Realty Trust (NYSE: FPO) has acquired 1401 K Street, a 117,093-square-foot office building in Washington, D.C., for $58 million. The property, also known as The Tower Building, is included in the National Register of Historic Places.
Completed in 1929, the 12-story Art Deco structure was 88 percent leased to 22 tenants at the time of the sale. First Potomac’s acquisition included the assumption of $37.3 million in existing secured mortgage debt, while the remainder will be funded through a draw on the company’s revolving line of credit.
“We are very pleased to add 1401 K to our portfolio,” says Nicholas Smith, CIO of First Potomac. “This iconic building fits in nicely with our strategic plan to acquire, own and operate high-quality office properties in the Washington, D.C. metropolitan area.”
Designed by architect Robert Beresford, 1401 K Street was the first Art Deco building in Washington, D.C. and the tallest high-rise in the city upon its opening. The structure still ranks among the 10 tallest buildings in the city.
Located adjacent to Franklin Square, one of D.C.’s largest downtown parks, 1401 K Street offers access to the red, blue and orange Metro lines, as well as nearby restaurants and entertainment.
“1401 K further strengthens our position in the downtown office market and provides an opportunity to continue to grow the portfolio by acquiring assets where we see the potential for long-term rental rate growth and value appreciation,” says Smith.
Guardian Realty Investors LLC sold the asset.
First Potomac plans capital improvements for the property, including restroom renovations and upgrades to the lobby, elevator cabs and fitness center. Mark Klug, Max Friedman and Abigail Todd of CBRE will lease the facility on behalf of the owner.
Headquartered in Bethesda, Md., First Potomac Realty Trust owns a portfolio totaling more than 9 million square feet in Maryland, Virginia and Washington, D.C. The company’s stock price closed at $12.78 per share yesterday, down from $15.06 per share a year ago.
— John McCurdy