At George Washington University, even members of the administration mention the sarcastic nickname, "The George Washington University Real Estate Company," when they talk about the university's investment policies.

Rather than a traditional endowment, GW derives its financial strength from its chunk of land in Foggy Bottom fronting on Pennsylvania Avenue. And the way GW has aggressively developed that property in the past few years has won it that nickname -- and a good deal of additional criticism from inside and outside the university.

Students -- and some faculty members -- complain that money that should be spent on educational programs and academic buildings is being spent to build structures that house Potomac Electric Power Co. and the National Academy of Science. Neighborhood groups gripe that the university has transformed a quiet residential neighborhood into a busy commercial area composed of faceless, multistory office buildings.

GW officials deny those accusations and say that with no traditional endowment to speak of, they've had no choice but to follow the development strategy they've adopted.

"Goodness sakes, if the university had an endowment like Harvard, Yale or Texas, there wouldn't be a problem with public relations over real estate," says university President Lloyd H. Elliott. "This land for GW constitutes the financial strength of the institution, just the same as the oil lands serve the University of Texas, and Harvard's endowment serves Harvard.

"It seems awfully difficult to get the message across here that GW's real estate is for the benefit of GW," he adds. GW isn't the only large university backed by real estate. Columbia University, for instance, owns the land in Manhattan under Rockefeller Center.

Even as GW students demonstrated against a 25 1/2 percent tuition increase last week in front of the university administration building, construction workers a couple of hundred feet away were putting up the university's latest structure, a mammoth commercial office building on I Street between 20th and 21st streets NW. Called 2000 Pennsylvania Avenue, the project is known more familiarly as Red Lion Row, after a popular campus drinking spot located on a block once lined with townhouses.

University officials argue that the commercial buildings pay for projects such as the academic center, a faculty office and classroom building opened earlier this year. And they say that for each square foot of commercial space the school has opened in the past few years, it has built or purchased three square feet of space for university use.

"We've been able to provide a lot of new facilities that are academically oriented without paying for it out of the tuition fund," says Charles E. Diehl, GW's vice president and treasurer and the architect of the building policy. "That has helped moderate tuition."

The slogan for GW's real estate dealings has been, "One building builds another," with the revenues from each commercial building paying for new development that either produces revenue or can be used for academic purposes. "We've been able, if you will, to bootstrap ourselves from land ownership to a revenue-producing real estate standpoint," Diehl says.

Although GW is responsible for considerable debt payments on the 13 buildings it has built in the past 15 years, it says income from the five commercial buildings in that group will offset the debt. Once the buildings are paid off, the revenues will be available for other uses.

And not a moment too soon, probably. GW has used up all the land it has for large-scale commercial development. Prohibited by the National Capital Planning Commission from expanding outside its current boundaries, the university can now add revenue property only by buying and renting out townhouses on campus (it recently purchased five townhouses on Virginia Avenue) or by developing land in the suburbs, which officials say they have no plans to do.

But GW officials seem content to retire their real estate development company. By the end of the century, says Johnson, "we will have most of our major building projects completed, and all revenue from investment properties, which will be relatively significant, will be available to support the operating budget."