Based on sales of office properties in 2013, this year could see new records set

January 5, 2014

Investments in D.C. office properties over the past five years continue to show an upward lift, judging by the prices being paid per square foot of space.

The two highest average sale prices per-square-foot for individual office investment sales in the city occurred in 2013. Over the past three years, the average sale price per-square-foot has risen from $468 per square foot to nearly $580 per square foot, a nearly 24 percent increase.

The first two quarters of 2013 saw investment office building sales with the highest average per-square-foot sale prices since 2011 in the District. In the central business district, 1200 19th St. NW traded for $885 per square foot, and the Commercial National Bank Building at 700 14th St. NW sold for $881 per square foot.

The central business district also saw the single largest overall sale price in 2013 for the sale of One Metro Center at $305.7 million.

If that is any sign of what is to come this year, D.C. is likely to see more record-setting office building sales, perhaps one day even eclipsing the $1,000 per square foot sale price threshold.

While the year was marked by several high-value transactions, overall sales volume for investment office properties in the District for 2013 was its lowest level since 2011.

Kirstie Boatright is a research manager with CoStar Group in Washington.

Top office investment (per square foot)
Rank Address Bldg SF Price per SF Property Name Sale date Sale price Seller Buyer
1 1200 19th St. NW 334,175  $885.76 1200 Nineteenth 6/28/2013  $296 million Hines Fosterlane Realty
2 700 14th St. NW 224,558  $881.73 Commercial National Bank Building 8/7/2013  $198 million Tishman Speyer Paramount Group
3 1399 New York Ave. NW 122,922  $867.76 Executive Tower 12/23/2011  $104 million Real Estate Capital Partners Vornado Realty Trust
4 2099 Pennsylvania Ave. NW 207,256  $832.30 2099 Pennsylvania Avenue 4/14/2008  $172.50 million Wealth Capital Management Vico Capital
5 1999 K St. NW 250,345  $829.86 1999 K St. NW 9/1/2009  $207.75 million Vornado Realty Trust Deka Immobilien 
6 733 10th St. NW 169,271  $827.08 10th and G 5/1/2012  $140 million Skanska USA Jamestown
7 325 7th St. NW 169,542  $819.86 Liberty Place 6/22/2011  $139 million Beacon Capital Partners Paramount Group
8 1101 Pennsylvania Ave. NW 219,627  $819.57 Evening Star Building 6/23/2010  $180 million KanAm Group TIAA-CREF
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