EBITDA increased to $359 million in 2006 from $291 million in 2005, due to the $775 million of acquisition capital that Mitchell, working with Mike and Michelle, invested in 2005 and to a 4.3% same store improvement. Mitchell, Brendan Owen and team are leasing up Crystal City, and they are excited. They were proud to show off Crystal City as host of our May 2006 investor conference.(4) Last week, they signed a letter of intent with the Red Cross, for 95,000 square feet, the latest in a string of private sector tenant successes in Crystal City. Mitchell is equally comfortable wearing his leasing hat or his development hat Ñ he has four important District of Columbia developments in the pipeline, see Appendix III.
Mitchell and his team, with help where appropriate from Mike, David and Michelle, have grown our Washington business to 18 million square feet, have worked through the 1.9 million square foot PTO vacancy and have
(4) Special thanks to Mitchell, Mara and the whole Washington gang who worked so hard and did such a great job on this conference.
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completed the Crystal City physical repositioning and
re-branding. Mike and I believe we have doubled our money in Washington, so far. What we haven't yet benefited from is a healthy dose of rent growth, but with these assets in these locations, we expect this will come.
In July 2005, we acquired for $196 million H Street Building Corporation, the owner of a 50% interest in a group of assets in Pentagon City, just across Route 1 from our Crystal City assets, and 577,000 square feet of office assets in the District of Columbia. We acquired the underdog's half in a messy situation. The litigation promised by our new partner erupted immediately and has raged continuously, sort of like what they call scorched earth. One of the ground lessees piled on, claiming he had a right of first offer. Litigation is a form of business warfare which, over time, exhausts all participants. We are now in settlement conversations, which may or may not bear fruit.
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