A Toronto-based life insurance company paid a record price of $1,000 a square foot recently for two small parcels of land in the old downtown area, providing the latest example of how developers are snapping up property in the District's revitalized core east of 14th Street NW.
Manufacturers Life Insurance Co.'s real estate subsidiary paid a total of $3.4 million for the two parcels in the 1100 block of F street NW. The subsidiary now owns five lots, amounting to about 50,000 square feet, in the downtown block bounded by E, F, 11th and 12th streets.
The most recent transactions, which occurred in January and April, gave the insurance firm a controlling position in the block, according to real estate specialists.
"This is clearly far and away the highest price that has been paid within the new downtown area, which is actually the old downtown," Rufus Lusk III of Rufus S. Lusk and Son Inc., a real estate information service, said yesterday.
Lusk said Manufacturers paid the $1,000-a-square-foot price on the two lots because they were the final parcels in a land assemblage that will enable the firm to build an office building containing up to 500,000 square feet, should the company choose to do so.
During the last three years, most property sold in that area for $400 to $600 a square foot, according to Lusk. Previously, the highest price paid was $833 a square foot for a parcel acquired by developer Gerald Hines in January 1985 to be part of Columbia Square, a major new office building, with the law firm of Hogan & Hartson as the lead tenant, in the block directly to the west of Manufacturers' property.
The Manufacturers' assemblage is especially valuable, Lusk said, because of its proximity to Columbia Square.
"It's a good investment," he said.
The Hines project, at 555 13th St. NW, is one of several buildings constructed in the last three years that have altered the old downtown's skyline. Expected to be ready for occupancy by the end of the year, the Hines project is taking shape in an area where development once came to a virtual halt after the racial violence of 1968.
Richard Harris, vice president in charge of acquisitions for Manufacturers, said yesterday that the insurance firm had "no definite plans at this point in time" for developing the F Street block and does not expect to start building on the property for several years.
Harris disputed that his firm had paid a record price for the two lots that it had purchased there most recently.
However, information supplied by the Lusk service shows that Manufacturers paid $1.3 million in January for a small corner lot located at 1118 F St. NW and $2.1 million in April for a larger lot located at 1114-16 F St. NW. Both purchases amounted to $1,000 a square foot, Lusk said.
Steve Goldstein of Julien J. Studley Inc., a commercial leasing company, said the recent purchases by Manufacturers indicate the continued developmental vitality of the old downtown.
"Without question, it's hot, and it's going to go on for a couple of more years," Goldstein said. "When major law firms move from Connecticut and K to the eastern downtown area, it's a standard for what's going on."
In addition to its recent purchases in the old downtown area, Manufacturers paid a record $7.5 million price last year for two parcels of land two blocks from the White House.
One of the tracts that sold for a record-high price for the District is the former site of the Sans Souci restaurant in the 700 block of 17th Street NW.