Updated: Thursday, Dec. 7, 2023, at 6:09 p.m.
Officials will buy the Residences on The Avenue — an apartment building also home to Whole Foods, Sweetgreen and other retailers — after selling a lease to the land about 15 years ago.
University spokesperson Julia Metjian said Wednesday that GW will close a $140 million deal purchasing the Residences on The Avenue, a 335-unit apartment building on I Street between 21st and 22nd streets, as well as its ground-floor retail partners in mid-January. Wafra Inc., an investment firm backed by Kuwait’s public pension fund, currently owns the building, having bought the residential and retail space from developer Boston Properties in 2015 for $196 million.
GW has long owned the underlying land but leased the rights to build on the square to Boston Properties in 2008. Boston Properties in 2011 opened the Residences on The Avenue — as well as an office building on Pennsylvania Avenue that remains under Boston Properties’ ownership — before leasing the apartment building to Wafra in 2015.
Metjian said GW is buying the Residences on The Avenue and its ground floor tenants initially as an investment, adding that officials will consult members of the local community about their plans and subsequently file for any appropriate “regulatory relief.”
“We are currently developing our long-term plan for the use of this investment property,” Metjian said.
Metjian said the University will continue to manage the Residences on The Avenue with “no changes” to its units priced at market rate, Affordable Dwelling Units — living units typically restricted to households within a certain income range and offered at a below-market rate — or retail tenants.
Boston Properties in 2011 built the buildings housing The Avenue apartment building, ground-floor retailers like Whole Foods, Circa, Roti, Sweetgreen and Citibank, and commercial space home to several law firms under a 60-year ground lease purchased from GW in 2008. The lease, which Washington Business Journal named the 2011 “deal of the year,” provides $9.1 million annually for GW’s endowment for academics, financial aid and construction projects.
Boston Properties sold its lease to the residential and retail portion of the property to Wafra in 2015, two years after the developer put the complex on sale in 2013 following its opening in 2011. University officials said at the time that GW’s revenue from the deal would not change under the new leaseholder.
The University first purchased the entire property where the Avenue is located, known as Square 54, in 1949 for about $198,000, according to deed records.
The Residences on The Avenue building, which houses some GW students, includes a rooftop lounge area, pool and gym, according to the complex’s website. On Nov. 1, D.C. Attorney General Brian Schwalb sued 14 landlords, including the management company that oversees The Avenue, for allegedly inflating rent prices by seven percent across 40,000 apartments.
GW’s purchase of the Residences on The Avenue is another development to the University’s real estate portfolio in Foggy Bottom. In July, the D.C. Council approved GW’s $27.5 million sale of The Aston, a former residence hall, to the D.C. Department of General Services, which plans to convert it into a shelter for unhoused mixed-gendered adult families and medically vulnerable people alongside the Department of Human Services. The shelter is set to open in either spring or summer of 2024.
Officials also bought a 450,000-square-foot office building from the World Bank valued at $231.6 million for roughly 5 percent of its value in December 2022. The University also agreed to lease out their property at 2100 Pennsylvania Ave. to Boston Properties for $194 million in 2019 after the firm redeveloped the space, which houses businesses like Tatte, law firm WilmerHale and the soon-to-be relocated campus store.
