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WASHINGTON, DC-Two operating companies of Marsh & McLennan Cos., Inc., have extended their leases at 1255 23rd Street NW, the West End part of the District, for an additional 10 years. At 139,516 sf, it is one of the largest lease renewals this year, according to statistics by CB Richard Ellis.

Executive managing director Julie Schuelke of Studley’s Washington, DC office represented Marsh and Mercer in the transactions. The landlord, CarrAmerica, was represented in-house.

The new 10-year leases start in December 2006 and include expansion options to support business and employee growth as well as allowance packages to fund interior renovation work and upgraded security for the Marsh and Mercer operations. Marsh Inc., Mercer Human Resource Consulting LLC and other MMC operating companies, including Kroll, NERA, and Mercer Oliver Wyman, will continue to house their business operations on five floors of the class A building.

“While our employee base spans the three jurisdictions that surround the nation’s capital, our real estate plan focused on keeping our offices in downtown Washington,” Paul Hatchett, a managing director of Marsh and head of the firm’s Washington, DC operations, says in a statement. “Marsh has maintained its offices in Washington, D.C. throughout the firm’s entire history in the mid-Atlantic region, and we chose to remain in our current building, which offers the amenities we require in a location central for our employees here.”

Space in class A in most of Washington, DC remains at a premium and the trend for the last two years has been for companies to remain put in their locations. According to CBRE, two of the top three lease transactions of 2006 were renewals totaling 268,096 sf. In Q1, the American Bankers Association’s renewal of its 141,216-sf lease at 1120 Connecticut Ave., NW marked the largest transaction thus far in 2006. In Q2 law firm Dow, Lohnes and Albertson renewed its 126,880-sf lease at 1200 New Hampshire Ave., NW, according to CBRE. The largest direct lease of the year so far occurred in the second quarter when the DC government signed for 108,000 sf at 1125 15th St., NW, CBRE said.

According to CBRE, average rental rates for Class A buildings dropped from $45.27 in the first quarter to $44.20 in the second.

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