An owner that bought a downtown D.C. office building at a steep discount in late 2023 has landed a new infusion of capital to repay its debt and fund upgrades.

Kairos Investment Management Co. secured a $38.3M loan from Harbor Group International for 1250 Eye St. NW on the southeast corner of Franklin Park, HGI announced Tuesday. The loan was also recorded in D.C. deed records.

The Irvine, California-based owner bought the 180K SF building in December 2023 from Rockville-based DSC Partners for $36M. The price was a third of what the seller had paid in 2018.

The loan will be used to refinance the owner's previous debt, complete renovations to the property and support leasing activity, HGI’s release says.

The new loan is about $20M more than what deed records show Kairos owes on its prior loan. The company’s outstanding balance on the $24.7M acquisition loan it secured in 2023 is $18.8M.

The planned renovations include a 12th-floor amenity suite with a lounge, conference center, kitchen and terrace, the continued development of prebuilt suites, and upgrades to the lobby, gym, bike room and parking amenities.

“We believe this renovation will bring new energy to a prime office asset, enhancing its appeal to today’s tenants and driving long-term value,” Kairos President and Chief Investment Officer Jonathan Needell said in the release.

Kairos' renovation play represents an investment that the prior owner was unwilling to make.

Shortly after DSC Partners sold the property, co-founder Doug Donatelli told Bisnow that he had decided that selling it for a third of its initial investment was smarter than putting more money into it.

“We would love to have seen a signal from the market telling us it made more sense to make the investment than to bail, but that signal was never there,” he said in January 2024.

It is unclear how much vacancy the building held when Kairos purchased it and how much it has now, but the release says the new owner has “successfully leased a significant portion of the property.”

1250 Eye was built in 1982. Its tenants include PayPal Giving Fund, public relations firm Democracy Partners and HKS Architects, according to their websites. Its ground-floor retailers are plant-based Asian fusion restaurant Pow Pow and Blick Art Materials.

“We’re seeing renewed momentum in the Class A office sector, particularly for properties that offer strong amenities and prime urban locations,” said Michael Nathan, chief investment officer for HGI's office business. “This financing supports a thoughtful renovation plan that aligns with our debt strategy of lending on assets with long-term demand fundamentals and partnering with high-quality sponsors.”