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Wednesday, January 5, 2011

By Erika Morphy

Developer Acquires 1438 U St. With Eye on Retail

WASHINGTON, DC-A two story-building in the District's U street corridor has traded for $2.75 million, or $229 per square foot. The Rock Creek Property Group acquired the 12,000-square-foot building, with an eye to redeveloping it for a retail use in this historic neighborhood. Originally built for the US Post Office in the early 1900s, the property has a total mixed-used development potential of approximately 25,000 square feet. 

It was a tricky deal to close, Rock Creek's Gary Schlager, one of the fund's principals, said in a prepared statement. "We've been working on this acquisition for almost a year and had to manage a foreclosure, auction, contract assignment, tenant eviction, real estate tax liens, an out of town bank and everything in between." Rock Creek was unable to return a call to in time for publication.

The company pursued the asset because it was the only property of its size along the popular 14th and U street corridors. Rock Creek will be targeting retailers, non-profit organizations and boutique law firms or other local service providers with its redevelopment. This is the second building the company has acquired here since 2009.