The iconic office complex surrounding the Navy Memorial on Pennsylvania Avenue could soon have a new owner.

D.C.-based PRP Real Estate Investment Management has been engaged in talks to purchase Market Square at 701 and 801 Pennsylvania Ave. NW from a joint venture of Blackstone and Pimco-owned Columbia Property Trust, a source with knowledge of the deal tells Bisnow.

A Blackstone spokesperson told Bisnow the firm began writing this property down four years ago and is engaged in a sale process.

"We aim to invest in sectors with strong fundamentals propelled by macro demand trends, which is why the majority of the real estate we own is in sectors like logistics, student housing and data centers," the spokesperson said.

PRP and Columbia Property Trust declined to comment.

The two 13-story buildings sit across from the National Archives and next to the headquarters of the FBI, which is planning to leave for a new facility in Maryland. Market Square is also three blocks south of the Capital One Arena, which is slated to lose the Wizards and Capitals to Virginia.

At 696K SF, the properties consist of mostly office space, plus ground-floor retail and condos. Its office space was 90% leased as of 2019.

The properties broke a record for price per SF in the District when they were sold to Columbia Property Trust in 2011 for $613M, or about $905 per SF.

Blackstone purchased a 49% stake in the complex in 2015 for $291.6M, putting the value at the time at $595M. The owners then launched a substantial effort to upgrade the asset, completing the $15M first phase of renovations in 2016.

Market Square's office tenants include law firms Kilpatrick Townsend & Stockton and Debevoise & Plimpton as well as Edison Electric Institute, according to their websites. Its retail tenants include a Wells Fargo branch, fast-casual restaurants Rice Bar and Chopt, the Navy Memorial Visitor Center and the Naval Heritage Center museum.

PRP also owns the nearby 1111 Pennsylvania Ave. NW. That property is 95% leased to law firm Morgan Lewis & Bockius through July 2032, according to PRP’s website.

While a price hasn't been revealed for the Market Square deal, it could mark one of D.C.'s largest office investment sales in recent years, as high interest rates and uncertainty about the office sector have stymied the market. Through the third quarter, D.C. was on pace to record its lowest office sales volume in 20 years, with just $595M in total sales through September and the year's largest deal standing at $100M, according to Avison Young.