Why Break In When You Can Lease the Office?
Tuesday, October 24, 2006
One of the Watergate offices that was burglarized 34 years ago, setting off the scandal that led to the resignation of President Richard M. Nixon, is available for lease as new owners plan a renovation of the office building and shops.
The office, Suite 610, was one of four suites occupied by the Democratic National Committee in 1972, which Republican operatives entered to plant eavesdropping equipment.
"It's a very recognizable building," said Andrew T. Felber, a first vice president at CB Richard Ellis, which is one of the brokers leasing the office space. "Here's a unique opportunity to lease a piece of history."
The 4,055-square-foot office, slightly more than half the size of a tennis court, was occupied until this summer by Urenco Inc., a manufacturer of enriched uranium for nuclear power utilities that moved to Virginia. The space is renting in the low $40s per square feet. That compares with downtown, where space rents in the mid-$40s and up.
Felber said he's shown the space to four tenants, including a law firm, a real estate developer and a finance company. He passes out a fact sheet explaining the details of the burglary. "People's reaction is 'Wow, this would be kind of cool,' " he said.
Last year, BentleyForbes LLC, a real estate investment firm in Los Angeles, bought the 11-story office building and 61,000 square feet of retail space at 2600 Virginia Ave. NW for $86.5 million from Trizec Properties Inc. of Chicago. The company is planning a $3 million renovation starting in 2007.
Most of the work will be devoted to sprucing up the interior. The owners said they would like to remove or improve a retaining wall on Virginia Avenue, but such changes would have to be approved by the city's historic preservation review board. The Watergate was designed in the 1960s by Italian architect Luigi Moretti and sits next to the Kennedy Center.
The plans call for new signs for shops along Virginia Avenue; replacing pavement; putting in new landscaping, storefront windows and lighting; redoing a fountain in the courtyard; and upgrading elevators, carpets and restrooms in the office building.
Brokers at CB Richard Ellis, which is also leasing the retail space, said they are looking for a restaurant that would serve a casual lunch and another white-tablecloth restaurant. The complex houses a bakery, salon, florist, deli, custom framing store and barbershop. Many of the tenants are likely to stay, and the CVS and Safeway stores are likely to expand.
"It's the first time in years that you'll be creating a true sense of place in that part of the District at such a historic and notable building," said Lance Marine of CB Richard Ellis, who is helping lease the retail space.
The Watergate complex consists of a hotel, which is being converted to cooperative apartments; three residential buildings with 644 co-op units; and another office building at 600 New Hampshire NW that is owned by Atlantic Monthly magazine owner David G. Bradley.
Many retail tenants at the Watergate welcomed improvements, saying the building had become rundown and tired-looking.
"It's about time," said Claudia Buttaro-Pfeffer, owner of the Watergate Salon & Day Spa. Her salon has been in the complex for 45 years and employs 20 people. "It was looking old. They were just doing patches here and there to make it look presentable. We've had water leaks in the ceiling over my front desk."
Phil Rascona, owner of the Watergate Barber Shop whose customers have included Sens. Robert J. Dole, Joseph I. Lieberman and Richard C. Shelby, favors renovation but worries that rents will rise.
"I'm for it as long as it doesn't cost too much and drive everyone out of business," Rascona said.