The $1,000 barrier has been broken: For the first time in history, a D.C. office building has sold for more than a grand a square foot.
TIAA-CREF and Norges Bank Investment Management paid $392 million, or $1,075 a square foot, to buy PNC Place at 800 17th St. NW near Farragut Square. The sale was announced in a press release Monday; the price was recorded in D.C. land records.
The record for a Class A or trophy building is a huge symbolic shot in the arm for D.C.’s investment sales market, which has flirted with the milestone for years. Wells Real Estate Investment Trust set the last record with its acquisition of the two-building Market Square for about $905 per square foot in 2011. In February, Morgan Stanley’s Prime Property Fund paid $948 a square foot for a 64.1 percent stake in 801 17th St. NW, right across the street from PNC Place.
Pittsburgh-based PNC Financial Services Group and Vornado/Charles E. Smith developed the 364,500-square-foot PNC regional headquarters in 2010. The building — also home to Holland & Knight, Analysis Group and Haynes & Boone — achieved LEED Platinum designation, the highest possible, from the U.S. Green Building Council.
The sale appears to be the first partnership between TIAA-CREF and Norges in D.C. Both have been working to expand their presence in Washington’s office market but independent of each other. Norges teamed up with MetLife nearly a year ago to buy the Thurman Arnold building at 555 12th St. NW for about $505 million and is gearing up on a renovation and rebranding of that property. TIAA-CREF, meanwhile, has had a pretty health appetite for D.C. real estate and set a its own record earlier this year with its acquisition of The Woodley for $195 million, or about $920,000 per unit.
Holliday Fenoglio Fowler marketed the property for sale on behalf of PNC. The HFF team was led by Executive Managing Directors John Pelusi and Stephen Conley along with Andrew Weir, Jim Meisel, Dek Potts, Matt Nicholson and Dave Baker.
