University of Southern California Capital Campus
Project Type: Urban Campus Acquisition, Build-Out
Space Use: Education, Event, Meeting Space, Office
Location: Washington, D.C.
Project Size: ~61,000 SF
Services Provided: Acquisition, Construction Management & Oversight
In late 2022, the University of Southern California (“USC”) engaged JM Zell to assist in developing its long-term occupancy strategy in Washington, D.C., through the establishment of USC’s Capital Campus, which will enhance and expand USC’s academic and research expertise, innovation, and talent near national and global opinion leaders on the most pressing issues of the day.
JM Zell began the engagement by working with USC leadership to determine key criteria for operational and financial success. JM Zell then undertook a city-wide search to identify potential geographic areas and buildings that met the key criteria established by the working group and provided a general market overview to give context for future opportunity-specific analyses.
Given the drop in demand for D.C. office space and subsequent plummeting office values as a result of the Pandemic, USC leadership gained consensus around leveraging its financial strength to identify and acquire a distressed asset that could be re-utilized for USC’s specific use. JM Zell then refined the search, identifying specific opportunities that met key location and quality criteria with a seller in enough distress to create an economic opportunity without jeopardizing USC’s goals for timing.
Based on the evaluation of several options, USC selected 1771 N Street, NW as its top acquisition target due to its Dupont Circle location, recent full-building renovations, dedicated parking, street presence, and vacancy, giving USC the ability to fully program the building for its use. JM Zell initiated negotiations while simultaneously performing due diligence on the building and formed a team to plan renovations to accommodate its variety of uses (event space, education, studio, office administration, and conference center).
In March 2023, USC successfully acquired 1771 N Street, NW and immediately commenced construction of its extensive interior renovations overseen by JM Zell as its construction project manager. The scope of USC’s improvements included upgrades to base building systems to meet greater occupancy related to classroom and event spaces, state-of-the-art AV and IT packages, furniture and equipment, and signage and wayfinding coordination. JM Zell also navigated approvals with the Historic Preservation Office regarding exterior signage, balancing donor recognition requirements with sensitivity to the Dupont Circle Historic District Overlay location.
In addition to JM Zell’s role as construction project manager, JM Zell led the process for securing a full real estate tax exemption, creating significant value for USC as owner-occupier.
With JM Zell’s assistance, USC leadership was able to meet all operational and financial goals for the acquisition per the original leadership mandate. Additionally, by leveraging JM Zell’s broad range of expertise in brokerage and construction project management, USC commenced pre-construction earlier in the acquisition process and implemented an accelerated phased construction process to meet USC’s aggressive goal of delivering the space by the beginning of the 2024-2025 academic year.
If you are interested in learning more about how JM Zell can assist you in achieving your business and operations goals through real estate, please contact us here.