You build out your distro just like you would a user with two key differences:
- You will not add a proxy address for the email as you would with a user, manually adding this will confuse the sync and cause it to not work.
- You will need to add a display name attribute. Office 365 requires a display name be present in order to sync, and it will not be happy until you manually add one.
If you are unsure about where to add this attributes, they can be found under the attributes tab in active directory so long as you have the show advanced items option enabled.