The owner of The Avenue announced plans to put the commercial and residential powerhouse on the market last week, seeking a new buyer for a lease that has pumped millions of dollars into GW’s pockets.
Boston Properties announced Wednesday that it plans to sell the buildings that house apartments and Whole Foods Market along I Street. The planned sale, first reported by the Washington Business Journal, comes five years after the real estate giant signed a 60-year lease with GW that brings in about $9.1 million in revenue annually.
The University, which owns the property known as Square 54, will receive the same amount of revenue from the new lease owner, Senior Associate Vice President for Operations Alicia Knight said Friday. She called the complex – worth $360 million – a “true urban town center.”
University spokesman Dave Andrews said Knight “could not answer” whether the University had been part of the decision-making process behind the sale.
The University funnels money from the lease into its endowment for academics, financial aid and construction projects. GW’s real estate earnings have helped pay for many of the campus’ costliest construction projects, which have totaled a half-billion dollars in the last six years.
GW’s relationship with Boston Properties has become a model for future development sites like a section of Pennsylvania Avenue and GW’s most expensive project to date – the $275 million Science and Engineering Hall. The Journal also dubbed The Avenue the 2011 deal of the year, calling it “one of the most successful mixed-use developments in recent history.”
GW is relying on up to $150 million of receipts from the property to pay off debt spent on the construction of the engineering hall, which will sit across the street when it opens in 2015.
The Avenue’s lot sat vacant for about six years after GW Hospital moved next to the Foggy Bottom Metro station, until Boston Properties agreed to re-develop the site in 2004. Whole Foods Market landed a lease to open its doors in 2011.
The 335 apartments are about 92 percent occupied, the Washington Business Journal reported, with an average monthly rental rate of about $3,300.
In addition to the apartments and Whole Foods, the 850,000-square-foot complex includes an office building, six restaurants, Citibank, NIH Federal Credit Union and a children’s day care.