WASHINGTON, DC-Penzance is slowly building up occupancy at one of Washington’s most iconic complexes: the Watergate. The company acquired it at the end of last year from the mezz lender, amidst news that its anchor retail tenant, Safeway, would be leaving. Since then leasing at the complex has been relatively quiet, Matt Pacinelli, Penzance SVP of Leasing, tells GlobeSt.com, with tenants sitting back in wait-and-see mode to observe the new owner.

That may be changing with the announcement that CVS/pharmacy has signed a long-term lease to expand its presence from its current 8,000-square-foot space to 13,000 square feet at the former Safeway space. The deal makes CVS the largest tenant in the 65,000-square-foot retail plaza.

Penzance has retained Bill Miller and Alex Walker of Miller Walker Retail Real Estate to market the current 8,000-square foot CVS space along with the balance of the retail plaza. CVS is a clear example of tenants’ initial hesitancy about the Watergate; it inked a shorter-term deal when Penzance first acquired the asset.

“We worked to convince them to stay longer,” Pacinelli says. There have been other renewals of retail tenants as well, he adds, and “we're working on more right now.”

Currently there is about 100,000 square feet of vacant office space at the Watergate and 20,000 square feet of available retail space. The asking rates for the retail space are in the mid $40s per foot, triple net. For office, it is mid to upper $40s per square foot, gross.