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George Washington University has independently managed the mixed-use building at 2000 Pennsylvania Ave. NW since its construction in 1982, but now, as it faces two major vacancies, it is looking for help.
The university has retained Cushman & Wakefield to find a developer to enter into a long-term ground lease for the property, marketing it as a value-add opportunity, the Washington Business Journal reports.
The 404K SF building features a 10-story office tower and three stories of retail, known as the Shops at 2000 Penn. The retail includes Bertucci's, Au Bon Pain, Chipotle, CVS, a bakery and a photo repair shop.
GWU is preparing for the departure of the building's two anchor office tenants, both law firms. Cleary Gottlieb plans to move up the street in 2019 to 2112 Pennsylvania Ave. NW, a project Skanska began building on spec in late 2015. Morrison Foerster is also leaving for a new trophy office building, taking the top four floors at Akridge's 2100 L St. NW.
The deal would be similar to two nearby ground-lease transactions GWU has executed recently. Skanksa is developing the 2112 Penn project under a ground lease with the university, and Boston Properties built The Avenue 2200 Pennsylvania Ave. NW with the same arrangement.
"The university continues its efforts to reposition investment real estate assets with the goal of maximizing its returns in support of the university’s academic mission," GWU Senior Associate Vice President for Operations Alicia Knight said in a release. "Ground leases, such as those in place for The Avenue/2200 Pennsylvania Ave. and 2112 Pennsylvania Ave., allow the university to reduce its operating risks while maintaining or enhancing cash flow to the university."
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