PGP Acquires Fee Interest For $1.3B Capitol Crossing Project

Company Says First Office Building to Begin Construction In 2013.

Property Group Partners (PGP) has acquired the fee interest for three blocks of the recessed portion of Interstate 395 in downtown Washington, which PGP said will enable work to begin on the 2.2 million-square-foot Capitol Crossing development, part of which will be built on a huge platform over the interstate.

Development of the platform and the first office building in the unique mixed-use project — formerly known as “the air rights development” as reported by CoStar earlier this year — to be built on the largest contiguous undeveloped site remaining in downtown Washington, is now slated to begin next year, according to a PGP statement.

The platform will cover the roadway between 2nd and 3rd Streets NW, spanning from Massachusetts Avenue on the north to E Street on the south, creating seven acres of property when completed.

The project also will reconnect Capitol Hill with the East End district, cut off by the construction of I-395 in the late 1960s.

“As a development firm that has constructed iconic buildings throughout the world, this is by far the most creative project that we have ever tackled,” said PGP President Jeffrey Sussman.

PGP’s plans call for five major buildings, including a 150-unit residential building at 600 2nd Street and four office buildings addressed as 200 Massachusetts Ave., 407,000 square feet; 250 Massachusetts Ave., 546,000 square feet; 200 F Street, 685,000 square feet; and 201 F Street, 297,000 square feet. The office portion will seek LEED Platinum certification.

Skidmore, Owings & Merrill designed the master plan for the project, and Kevin Roche John Dinkeloo and Associates and Kohn Pedersen Fox Associates are design architects for the north and south block office buildings, respectively.

NAI KLNB served as originating broker of the transaction, and a team of leasing brokers from the Washington office of Cassidy Turley represents PGP as the leasing agent.