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D.C. Office Building Home to Dept. of Veteran Affairs Sells for $157 Million

Saban Capital Group Enters DC, Completes Deal with Paramount Group for 425 Eye St. NW
October 1, 2018
For the third time in September, a Northwest Washington, D.C., office building has sold for north of $100 million, this time at the corner of Eye and Fourth streets.

Saban Capital Group, in its first investment in the Washington market, finalized a deal with New York City's Paramount Group to acquire the 425 Eye St. NW building anchored by the Department of Veteran Affairs for $157 million, or approximately $407 per square foot.

Originally completed in 1973, the seven-story, 385,997-square-foot building underwent a complete renovation following Paramount's purchase of the property in 2005 for $135.5 million.

In 2011, the General Services Administration signed a 10-year deal on behalf of the Department of Veteran Affairs to fill 285,434 square feet in the building as swing space while the department's main office at the Lafayette Building at 811 Vermont Ave. NW underwent a $105 million renovation. That renovation wrapped up earlier this year.

Bowen Hsu, managing director for Saban Real Estate, said the company plans to carry out a value-add initiative at 425 Eye St. A private investment firm based out of Los Angeles, Saban Capital primarily invests in student housing, government offices and self-storage space. The company owns 12 properties totaling approximately 1.5 million square feet leased to the U.S. government.

The Department of Veteran Affairs leases 90 percent of the Eye Street property. Additional tenants in the building, which is 98.7 percent leased and certified LEED Platinum, include Family Matters of Greater Washington DC, MedPAC, restaurants Alba Osteria and Ottoman Taverna, and Orangetheory Fitness, according to CoStar information.

James Meisel, Andrew Weir, Andrew Scandalios, Stephen Conley, Matt Nicholson and Graham Stevens of HFF handled the sale for Paramount Group. Cary Abod of HFF arranged financing through EagleBank on behalf of Saban Capital.

The transaction is the third Washington office sale in 30 days to sell for more than $100 million, behind the $174.5 million sale of 1200 New Hampshire Ave. NW to GreenOak Real Estate, and the $121.4 million sale of The Executive Tower at 1399 New York Ave. NW to Exan Capital.

For more information on the sale of 425 Eye St. NW, please see CoStar Comp #4527114.
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