Embattled Tech Firm 2U Moves HQ To Crystal City As CEO Departs
2U, once a high-flying education tech company that went through Chapter 11 bankruptcy this year, has now moved its headquarters from Prince George's County, Maryland, to Northern Virginia.
The company relocated its offices last month from a building near the New Carrollton Metro station in Lanham to 2345 Crystal Drive in Crystal City, the Washington Business Journal reported. Its website lists its address as Suite 1100 in the 11-story building.
The company hasn't said how many square feet it is occupying in the Crystal City building, a 507K SF property built in 1988. The owner of that building, JBG Smith, declined to comment to Bisnow.
2U had occupied 309K SF at 7900 Harkins Road in Lanham, up from the 281K SF it had when it opened the space in 2017. Its grand opening event was attended by then-County Executive Rushern Baker, who had hailed the deal as a "major victory" for a county that has lagged behind the rest of the region in investment.
The company received a $2M loan from the Maryland Department of Commerce and a $1.5M conditional loan from the Prince George's County Economic Development Incentive Fund to build out the new headquarters, a project that had been expected to create 900 new jobs.
Seven years later, the company no longer has a presence in Maryland, a 2U spokesperson confirmed.
The Lanham building is owned by Florida-based Kawa Capital, which acquired it in 2017 for $82M from Cohen Equities. The New York-based investor bought 7900 Harkins Road in a foreclosure auction after its previous occupant, another technology company, vacated in 2013, the WBJ reported.
Kawa holds a $31.8M CMBS loan on the building that transferred to special servicing in August due to imminent monetary default, according to servicer commentary in Morningstar Credit's database.
The August servicer commentary says the sole tenant planned to vacate the building as part of its bankruptcy process. The WBJ reported in August that 2U had reduced its occupancy at the building, but it didn't say by how much.
Kawa Capital didn't respond to Bisnow's request for comment.
Along with a new office, the company also has a new leader. 2U announced Friday that Paul Lalljie stepped down as CEO after 10 months. Its board named Chief Financial Officer Matt Norden the interim CEO while it searches for a permanent replacement. Lalljie served as CEO after founder Chip Paucek stepped down.
The office and personnel moves come after 2U emerged from Chapter 11 bankruptcy on Sept. 13, restructuring as a private company after previously being publicly traded. It had filed for bankruptcy protection on July 25, saying the process would help cut its $945M in debt nearly in half. More than half of that existing debt was converted into equity in the newly private business.
