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WASHINGTON, DC-Columbia Equity Trust, Inc. will form a joint venture with Aetna to acquire Georgetown Plaza from Unicorn Wisconsin, LLC, a spokesperson tells GlobeSt.com. Georgetown Plaza is a 151,000-sf multi-tenant office and retail class B office building located at 2233 Wisconsin Ave. Columbia announced in December it was planning to acquire.

During its earnings call this week, the company reported that the contract price has since been reduced from $23.5 million to $23 million as a result of diligence findings. The deal had also been contingent on a ground lease that was set at that time to expire in December 2058. Since then, according to the announcement, the terms of the ground lease have been renegotiated, extending the maturity date to 2105. Also, Columbia had initially expected to fund the transaction with proceeds from its revolving line of credit and the assumption of an approximately $16.1-million mortgage loan that bears interest at 5.78% and matures in June 2013. Under the JV, which will close when the acquisition closes, Columbia will receive fee income from providing asset management and leasing services.

Columbia opted for the JV arrangement because the building is not fully stabilized with a vacancy rate of more than 30%, the spokesperson says. “When we acquire an asset that is not fully stabilized, we typically look to lay off some of that risk by bringing in a JV partner.”

Tonya Ginter, director of research of GVA Advantis, tells GlobeSt.com that at 3.2%, vacancies are extremely low for this District submarket. She notes that the Georgetown Plaza is primarily occupied by small business tenants, which may have an impact on how fast the building can be leased to full occupancy. “There is still 59,000 sf available,” she says.

Vacancies in the uptown submarket in which the Georgetown neighborhood is located did jump slightly in Q2, but that was primarily because a large tenant at 11 Dupont Circle vacated 20,000 sf in order to purchase a building in the East End, she adds. “20,000 sf doesn’t sound like much but this is a very small submarket.”

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