Pew's Mission to Lower Nonprofits' Office Rent

By Christopher Twarowski
Washington Post Staff Writer
Monday, June 16, 2008

Call it a nonprofit lifeline.

Pew Charitable Trusts, one of the largest nonprofit organizations in the nation, has acquired the 10-story office building at 901 E St. NW, just across the street from the J. Edgar Hoover Building. The 265,00-square-foot space will serve as the group's new Washington headquarters with a twist: Pew plans to lease 90 percent of the building to other nonprofit groups, at 10 to 15 percent below market rates.

"We plan to make this our home for a long, long time," says Rebecca W. Rimel, Pew Charitable Trusts' president and chief executive. "We are hoping to find nonprofits who want to make this their home for a long time."

Philadelphia-based Pew will combine its two downtown D.C. offices into the building on E Street NW. The organization has a staff in the area of about 150, which it expects to double over the next three years. Pew's increased presence in the District is fueled by a stronger emphasis on policy work and greater support from outside donors, Rimel said.

Pew's plan comes as other nonprofits have been leaving the District because of higher rents, said Sean Madigan, spokesman for the D.C. deputy mayor's office. Neil O. Albert, deputy mayor for planning and economic development, last year created a task force designed to keep nonprofit groups in the city as well as attract new ones.

"It's a real problem," Rimel said. "Many nonprofits want to be in the District for all of the reasons that we do: access to talent, access to colleagues and other nonprofits, access to policymakers. And at these rental rates, it's very, very hard to not only find the resources, but to justify the investment."

The going rate for comparable commercial space in the area is from the mid-$50s to the mid-$60s per square foot, said Matt Feeney, a managing partner at tenant-advisory firm CresaPartners who worked with Pew to find an office.

After two years of looking, Pew closed on its new digs in February for $155 million. Funding came from $200 million in bonds, $180 million of them tax-exempt, made possible with the help of the task force. The bonds were issued by the D.C. revenue bond program and financed by PNC Bank. The District has no obligation.

"It's a win-win for everybody," says Olivia Shay-Byrne, chair of the nonprofit task force and a partner in the law firm Reed Smith, which has an office on K Street. Shay-Byrne worked closely with Pew, acting as the borrower's counsel. "It's a win for the District. It's a win for the tenants. It's great for Pew because it's part of their mission to do this."

A 2007 report by the Nonprofit Roundtable of Greater Washington found that about 7,600 local, national and international nonprofit organizations served the greater Washington area. According to the report, sponsored by the World Bank, those nonprofits combined provided about 218,000 jobs and $9.6 billion in annual wages and taxes.

Pew is renovating the building, implementing a number of environmentally responsible construction practices and designs in the hope of achieving LEED (Leadership in Energy and Environmental Design) certification for the overall building and the higher LEED gold certification for its space. Pew will move into the top four floors beginning in December. The building is available immediately for new tenants.

Rimel said Pew is negotiating with potential tenants but would not disclose names. To sweeten the pot, nonprofits that move in will have use of the building's 1,750-square-foot conference room and meeting space, along with its fitness center.

One nonprofit besides Pew will definitely be there: the American Cancer Society, which has had an office on the fifth floor since 2001. It has three years left on its lease, after which it can renegotiate with Pew.

"We're pleased to be a part of an effort to strengthen the nonprofit presence in Washington," said Steven Weiss, the society's senior director of media advocacy. "So much of the culture of Washington, D.C., is found in the nonprofit community, and we consider that a vital part of what makes the city as vibrant as it is."

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