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Foreign Investors Compete for DC's Class B Office Product

"Cap rates for B buildings in the core have steadily compressed, dropping from 10.9% in 2000 to sub-5.5% today."

By Erika Morphy | erikamorphy | Updated on October 13, 2017

1100th block of 19th Street. Photo by Google Street View

WASHINGTON, DC–Foreign investors have traditionally liked Washington DC’s fundamentals and thus have been regular buyers of its trophy office product. Not so for 2017 however: Year to date, 81% of Class B investment sales volume has been driven by foreign buyers YTD, according to a JLL data point.

Indeed, investors of all types have noticed the B market’s performance, JLL said. Combined 2016-2017 Class B asset sales have accounted for 50% of overall downtown activity, up from less than 30% in 2010.

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