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Paramount Finalizes $220 Million Sale of 2099 Pennsylvania Ave.

UPDATE: Sales Price Represents $62 Million Mark-up from Paramount's 2012 Acquisition
August 8, 2018
Paramount Group has sold a Class A office building on Pennsylvania Ave. in downtown Washington, D.C., for $220 million, or about $1,054.37 per square foot - a sales price that represents a $62 million profit for the firm and the third largest office sale in the D.C. market this year.

According to public records, the buyer is the California Public Employees' Retirement System (CalPERS). Eastdil Secured represented Paramount in marketing the building to prospective buyers.

Paramount, a real estate investment trust out of New York City, paid $158 million in early 2012 to acquire 2099 Pennsylvania Ave., a 12-story, 208,776-square-foot building on a prominent corner one block from the George Washington University campus in Foggy Bottom.

At the time, the building was mostly empty. Paramount began to build the occupancy back up beginning in 2014 when it signed the law firm of Sheppard Mullin Richter & Hampton LLP to a 49,732-square-foot lease. That deal would be followed by leases with global law firm Ropes & Gray LLP, Bill Gates' global health partnership Gavi Alliance and commercial real estate firm Avison Young, among others. In a four-year span, Paramount successfully raised occupancy at the property from 31.6 percent to 98.5 percent.

Paramount's sale of 2099 Pennsylvania ranks as the third most expensive office sale of 2018 in Washington, D.C., so far this year, behind only the $254.5 million sale of the Washington Building at 1440 New York Ave. NW in January, and last week's sale of the Washington Harbour for $415 million.

It also ranks as the third D.C. office building this year to sell for more than $1,000 per square foot, along with the Washington Building and 900 G St. NW, which sold in January for a market-leading $1,282 per square foot.

2099 Pennsylvania features a fitness center, rooftop terrace and underground parking, on a site four blocks from the White House and within three blocks of the Foggy Bottom-GWU and Farragut West Metro stations.

Built in 2000, the trophy property was designed by Henry Cobb of Pei, Cobb, Freed & Partners. Paramount purchased the building from Vico Capital, an Ireland-based real estate partnership that had owned the property since 2008.

Paramount Group's sale of the building comes roughly 16 months after the firm sold the Waterview Tower in the largest single office sale in Arlington, VA, in 10 years.

Please refer to CoStar Comp #4475131 for additional information on this transaction.

Editor's Note: This news report was updated since it was originally published to indicate the sale has closed and to add the buyer, the California Public Employees' Retirement System (CalPERS).
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