Mitchell Schear, President of our Washington Office business, and team (with help from Mike in his role as our chief growth officer) have been building our Washington business. Since 2003, we have invested $1.1 billion in Washington. Our Washington Office business now contains 17.8 million square feet.(8)

We have upgraded the quality of our organization, retaining the best Charles E. Smith people while adding the likes of Mitchell, Laurie, Patrick, and now, Brendan. At the same time, we have been upgrading the quality of our assets. This year we acquired the Warner Building and the Bowen Building, two of the ten best in the District of Columbia. Here, we converted Kaempfer sliver interests into 100% ownership. We also acquired a 46% co-general partner interest (19 percentage points of which was acquired from Bob Smith and Bob Kogod) in a property in Rosslyn, VA on the very shores of the Potomac with direct views of the Capitol. This asset, the best fixer-upper in town, currently contains four office buildings with an aggregate of 714,000 square feet and two apartment buildings containing 195 units.

Most important of all, Mitchell reports that we are under a full head of steam in Crystal City leasing. Mitchell, our brand builder,(9) is hard at work repositioning Crystal City, populating it with private sector tenants (more profitable to us) augmenting our traditional GSA and government contractor tenants. We are responding aggressively to the PTO move-outs and to BRAC,(10) and in the end, we will be much the better for it.

Almost 13 years ago, a dear friend, John Levin, sent me a little five and dime desk plaque engraved TROUBLE IS OPPORTUNITY, in response to a deal which was going badly (but in the end, years later, turned out okay). This little plaque, really a good luck charm, which passed through the hands of the great Larry Tisch before it got to me and then to Rob Rosen and Frank Mori and others, now sits permanently and prominently in the middle of my desk. We talk about trouble being opportunity all the time. So here's the tale of H Street:

The Tompkins and Cafritz families had been in business together for over 50 years in the Washington, DC area, sharing control of several real estate entities. They worked together and shared control every day. Last year, they started to quarrel. It seems that one partner unilaterally seized control. The ousted partner, now owned by 40 or 50 heirs, probably not having the stomach for the fight, decided to sell. Potential buyers kicked the tires but the quarrelling and the uncertainty chilled the bidding. But, these are wonderful assets just across Route 1 from our Crystal City assets, and we surely do have the stomach for it. When the price got to be right, Mike and Mitchell pulled the trigger. We now own the ousted partner's 50% interest and, as promised, our new partner sued.(11) While this situation is currently hostile and in litigation and we will fight, and fight hard, we offer our hand to Calvin Cafritz in peace.