<PAGE>   1

                                                                       EX. 10.32


                               SUBLEASE AGREEMENT

        THIS SUBLEASE, dated as of January 1, 2000, by and between DGB
Enterprises, Inc. ("DGB"), a Delaware corporation (hereinafter called
"Sublessor"), and The Advisory Board Company ("ABC"), a Maryland corporation
(hereinafter called "Sublessee").

                                    RECITALS

                1.      Income and Growth Watergate, L.L.C., an Illinois
        corporation ("Lessor"), and Sublessor, as lessee, are the parties to a
        certain Lease Agreement dated as of August 7, 1992 (the "Overlease"),
        pursuant to which Lessor has leased to Sublessor the Premises (as
        hereinafter defined).

                2.      Sublessor and Sublessee have agreed that Sublessor will
        sublease to Sublessee the Premises.

                3.      The parties desire to set out in detail their agreements
        and the consideration for this sublease.

                                   ARTICLE I
                                  DEFINITIONS

                As used herein, the following terms shall have the following
        meanings:

                1.1.    "Commencement Date" shall mean the date hereof.

                1.2.    "Sublease" shall mean this sublease agreement as amended
        from time to time pursuant to the terms hereof.

                1.3.    "Sublease Term" shall mean the duration of the leasehold
        estate created by this Sublease as specified in Article III hereof.

                1.4.    "Premises" shall mean and refer to the portion of the
        Overlease Premises described in Attachment A hereto.

                1.5.    "Overlease Premises" shall mean the premises at 600 New
        Hampshire Avenue, N.W., Washington, D.C. described in the Overlease.

                1.6.    "Termination Date" shall mean the date that is the end
        of the Term as defined in the Overlease.

                                   ARTICLE II
                                DEMISED PROPERTY

                2.1.    Sublease. Sublessor hereby subleases to Sublessee and
        Sublessee hereby subleases from the Sublessor the Premises.



                                       1

<PAGE>   2


                                  ARTICLE III
                                      TERM

                3.1.    Term. The term of this Sublease shall begin on the
        Commencement Date and, unless earlier terminated as provided herein,
        shall end on the Termination Date.

                3.2.    Termination. Each of Sublessee and Sublessor shall have
        the right, in its absolute discretion and without liability to the other
        party, to terminate this Sublease at any time during the Sublease Term
        on not less than six (6) months prior written notice.

                                   ARTICLE IV
                                      RENT

                4.1.    Rent. During the term of this Sublease, Sublessee shall
        pay rent to Sublessor as detailed in Attachment A. Rent consideration
        shall be payable in equal monthly installments and shall be delivered to
        the Sublessor's address on the first day of every calendar month during
        the term of this Sublease.

                4.2.    Annual Adjustments to Rent. To the extent that annual
        cost of living adjustments increase the Annual Base Rent (as defined in
        the Overlease) payable by Sublessor pursuant to the Overlease, an amount
        equal to such increase shall be added to the rent payable under this
        Sublease pursuant to Section 4.1.

                4.3.    Additional Rent for Operating Expenses. To the extent
        that Additional Rent (as defined in the Overlease) relating to increased
        Operating Expenses (as defined in the Overlease) is payable by Sublessor
        pursuant to the Overlease, an amount equal to the portion of such
        Additional Rent that is in proportion to the area of the Overlease
        Premises that is represented by the area of the premises shall be added
        to the rent payable under this Sublease pursuant to Section 4.1.

                4.4.    Additional Space; Amended Allocation. Sublessor and
        Sublessee may, by mutual agreement, revise Attachment A to (i) add
        additional space to the Premises to be leased by Sublessor under this
        sublease, (ii) revise the location of the space leased under this
        Sublease, or (iii) make such other modifications and amendments as the
        parties may mutually agree.

                4.5.    Additional Rent for Building Maintenance. The rental
        rates detailed on Attachment A include an estimate of costs related to
        routine maintenance (cleaning, painting, etc.) of the Premises. Rental
        rates may be adjusted prospectively on April 1 of each year to the
        extent that Sublessor forecasts increases in such expenses. Such changes
        would be in proportion to the area of the Premises to the Overlease
        Premises.

                                    ARTICLE V
                                USE OF PREMISES

                5.1.    Use of Premises. Sublessee shall use the Premises only
        for the purpose of general office use and as otherwise described in the
        Overlease.

                                   ARTICLE VI



                                       2


<PAGE>   3


                           ASSIGNMENT AND SUBLETTING

                6.1.    Assignment and Sublease. Sublessee shall not mortgage,
        encumber, assign, sublease, or otherwise dispose of or transfer its
        interest in this Sublease or the Premises except as may be permitted by
        the Overlease.

                                  ARTICLE VII
                            UTILITIES AND SERVICES

                7.1.    Utilities and Services. Sublessor shall supply to the
        Premises utilities and services to the extent as may be permitted by the
        Overlease.

                                  ARTICLE VIII
                                QUIET ENJOYMENT

                8.1.    Quiet Enjoyment. If Sublessee pays the rent and other
        charges herein provided and performs all of the covenants and agreements
        herein stipulated to be performed on Sublessee's part, Sublessee shall,
        at all times during said term, peaceably and quietly have, hold and
        enjoy the Premises without disturbance from Sublessor or anyone claiming
        by or through Sublessor, subject to the terms of this Sublease and to
        the rights of the parties presently or hereinafter secured by any deed
        of trust or mortgage against the Premises.

                                   ARTICLE IX
                            FIRE AND OTHER CASUALTY

                9.1.    Restoration of Damaged Premises. In the event the
        Premises are damaged or destroyed or rendered partially untenantable for
        their then use by fire or other casualty, the Sublessee shall notify
        Sublessor and promptly repair the Premises and restore the same to the
        condition in which they were immediately prior to the happening of such
        casualty.

                9.2.    Rent Abatement. During the period form the date of such
        casualty until the Premises are repaired and restored, Sublessee's
        obligation to pay rent due hereunder, shall abate, but only to the
        extent that Sublessor's rent payment obligations under the Overlease are
        abated. The abatement shall be in the proportion of which the area of
        the Premises destroyed or rendered untenantable bears to the total area
        of the Premises.

                9.3.    Fire and Other Casualty. Except as herein expressly
        provided, this Sublease shall not terminate nor shall there be any
        abatement of rent as a result of fire or other casualty.

                                   ARTICLE X
                                   INSURANCE

                10.1.   Casualty Insurance. The Sublessee shall maintain in
        effect policies of (i) comprehensive liability insurance and (ii)
        insurance covering Sublessee's furniture, space, furnishings, trade
        fixtures and all other personal property from time to time on or in the
        Premises in an amount not less than 100% of their actual replacement
        cost.




                                       3


<PAGE>   4
                                   ARTICLE XI
                              SURRENDER OF PREMISES

        11.1.   Surrender of Premises. The Sublessee shall on the expiration of
the lease term or the sooner termination of the Sublease Term surrender to the
Sublessor the Premises, including all buildings, replacements, changes,
additions, and improvements constructed or placed by the Sublessee thereon,
with all equipment in or appurtenant thereto, and all movable trade fixtures
installed by the Sublessee.


                                   ARTICLE XII
                                  CERTIFICATES

        12.1.   Certificates. Either party shall, without charge, at any time
and from time to time hereafter, within ten (10) days written request of the
other, certify by written instrument duly executed and acknowledged to any
mortgagee or purchaser, or proposed mortgagee or proposed purchaser, or any
other person specified in such a request: (a) as to whether this Sublease has
been supplemented or amended, and if so, the substance and manner of such
supplement or amendment;(b) as to the validity and force and effect of this
Sublease, in accordance with its tenor as then constituted; (c) as to the
existence of any default thereunder; (d) as to the existence of any offsets,
counterclaims, or defense thereto on the part of such other party; (e) as to the
commencement and expiration dates of the term of this Sublease; and (f) as to
any other matters as may reasonably be so requested. Any such certificate may be
relied upon by the party requesting it and any other person to whom the same may
be exhibited or delivered and the contents of such certificate shall be biding
on the party executing same.

                                  ARTICLE XIII
                           EVENTS OF DEFAULT, REMEDIES

        13.1.   Default. Any of the following occurrences, conditions, or acts
shall constitute an "Event of Default" under this Sublease:


        13.1.1          If:

        (a)     Sublessee defaults in making payment when due of any the rent,
and if such default shall continue for five (5) business days after Sublessor
shall have given written notice to Sublessee specifying such default and
demanding that same be cured;

        (b)     Sublessee defaults in the observance or performance of any other
provisions of this Sublease, and such default continues for thirty (30) calendar
days after Sublessor shall have given written notice to Sublessee specifying
such default and demanding that the same be cured (unless such default cannot be
cured by the payment of money and cannot with due diligence be wholly cured
within such period of thirty (30) calendar days, in which case Sublessee shall
have such longer period as shall be necessary to cure the default, so long as
Sublessee proceeds diligently to attempt to cure the same within such thirty
(30) day period, prosecutes the cure to completion with due diligence, and
advises Sublessor from time to time, upon Sublessor's request, of the actions
which Sublessee is taking and the progress being made);

        13.1.2.         Sublessee abandons or vacates the Premises for a period
of ten (10) consecutive calendar days;


                                        4


<PAGE>   5





        13.1.3.         Sublessee files a petition in bankruptcy, for
reorganization or for an arrangement pursuant to Federal Bankruptcy law or any
similar federal of state law; is adjudicated bankrupt or become insolvent; is
unable to meet Sublessee's obligations as they become due; or takes any
corporate action in furtherance of any of the foregoing;

        13.1.4.         A petition or answer shall be filed proposing (a) the
adjudication of Sublessee as bankrupt or (b) the reorganization of Sublessee
pursuant to Federal Bankruptcy law or any similar federal or state law, and (1)
Sublessee shall consent to the filing thereof, or (ii) such petition or answer
shall not be discharged or denied within sixty (60) days after the filing
thereof;

        13.1.5.         A receiver, trustee, or liquidator (or other similar
official) of Sublessee shall be appointed with respect to (a) all or
substantially all of its businesses or assets or (b) the estate or interest of
Sublessee in the Premises and (I) shall not be discharged within sixty (60) days
thereafter or (ii) Sublessee consents to or acquiesces in such appointment;

        13.1.6.         The estate or inters of Sublessee in the Premises
shall be levied upon or attached in any proceeding and such
process shall not be vacated or discharged within sixty (60) days after such
levy or attachment; or

        13.1.7.         Sublessee is dissolved, merged, consolidated or
reorganized, or any change occurs in the ownership or control of Sublessee,
without the prior written consent of Sublessor.

        13.1.8.         Notwithstanding the provisions of paragraphs
13.1.3, 13.1.4, 13.1.5 or 13.1.6 hereof, if at any time during the term hereof,
(a) proceedings in bankruptcy, insolvency or other similar proceedings are
instituted by or against Sublessee, whether or not such proceedings result in an
adjudication against sublessee, or (b) should a receiver of the business or
asserts of Sublessee be appointed; such proceedings shall not affect the
validity of this lease so long as (1) the rent reserved hereunder continue to be
paid to Sublessor and (ii) the other terms, covenants and conditions of this
Sublease on the part of the Sublessee to be performed, are performed. In such
event, this Sublease shall continue to remain in full force and in accordance
with the terms herein contained.

        13.2.    Remedies. In case of Default,

                (a)     the rent shall become due thereupon and be paid up to
the time of re-entry, expiration and/or dispossession;

                (b)     Sublessor may elect the premises or any part or parts
thereof, whether in the name of Sublessor or otherwise, for a terms or terms
which may, at Sublessor's option, be less than or exceed the period which would
otherwise have constituted the balance of the term of this sublease;

        (c)     Sublessee shall also pay to Sublessor, as liquidated damages for
the failure of Sublessee to observe and perform Sublessee's covenants herein
contained, any deficiency between the (i) rent hereby reserved and (ii) the net
amount, if any, of the rents collected on account of the lease or leases of the
Premises for the period which


                                        5



<PAGE>   6




would have constituted the balance of the Sublease Term (hereinafter called
"Liquidated Damages"). Liquidated Damages shall be paid as the said rent
shall become due and payable in monthly installments. Sublessee shall also
pay to Sublessor such reasonable expenses as Sublesor may incur in connection
with reletting, such as brokerage and preparation for reletting (hereinafter
called "Consequential Damages").

                (d)     Liquidated and Consequential Damages shall be paid in
monthly installments by Sublessee on the Rent Payment Dates specified in this
sublease. Any suit brought to collect Liquidated and Consequential Damages for
any month shall not prejudice in any way the rights of Sublessor to collect
Liquidated and Consequential Damages for any subsequent month by a similar
proceeding. Sublessor, at Sublessor's option, may make such alterations,
repairs, replacements, and/or decorations in the premises as Sublessor; in
Sublessor's sole judgment, considers advisable and necessary for the purpose of
reletting the premises; ad the making of such alterations, repairs,
replacements, and/or decorations shall not operate or be construed to release
Sublessee from liability hereunder as aforesaid. Sublessor agrees to use its
best efforts to mitigate all damages and to relet the Premises in the event of
any Default specified herein.

                                   ARTICLE XIV
                             RIGHT TO CURE DEFAULTS

        14.1.   Default by Lessor. If Sublessor fails to perform any covenant
or agreement in this Sublease contained on the part of Sublessor to be
performed, then and in such event, after the continuance of any such failure or
default for thirty (30) calendar days after notice is given by Sublessee to
Sublessor (notwithstanding any delay or forbearance in giving such notice),
Sublessor may cure such default. Sublessee may further make all necessary
payments in connection therewith, including, but not limited to the payment of
any reasonable attorney's fees, costs, and charges of or in connection with any
legal action which may have been brought. Sublessor agrees to pay to Sublessee
forthwith any amount so paid by the Sublessee, together with interest thereon
at the maximum legal rate, or if no such rate is establishes at the rate of 12%
per annum. All sums charged to Sublessor by Sublessee hereunder shall be
indebtedness of Sublessor to Sublessee payable on demand. If all such
indebtedness of Sublessor is not fully paid within 30 days after demand,
Sublessee may elect (i) to deduct such amount from rent subsequently becoming
due hereunder, (ii) terminate this Sublease upon thirty (30) calendar days
notice to Sublessor (unless Sublessor shall cure such default) or (iii) extend
this Sublease the same covenants and conditions and herein provided until such
indebtedness is fully paid by application to rents.

        14.2.   Default by Lessee. If Sublessee shall fail to make or perform
any payment or act required by this Sublease, then Sublessor may (but need
not), make such payment or perform such act for the account of Sublessee. All
amounts so paid by Sublessor, and all incidental costs and expenses (including
attorneys' fees) incurred in connection with such payment or performance,
together with interest thereon at the maximum legal rate, or if no such rate is
established at the rate of 12% per annum form the date of the making of such
payment or of the incurring of such costs and expenses, shall be paid by
Sublessee to Sublessor on demand.


                                        6





<PAGE>   7
                                   ARTICLE XV
                                 MISCELLANEOUS

        15.1.   Notices. All notices, demands, requests, consents, approvals,
offers, statements, and other instruments or communications required or
permitted to be given when delivered, or when mailed by first class registered
or certified mail, postage prepaid, and addressed as follows;

        If to Sublessor:

        Michael A. D'Amato
        DGB Enterprises, Inc.
        600 New Hampshire Avenue, NW
        Washington, D.C. 20037

        If to Sublessee:

        Jeffrey D. Zients
        The Advisory Board Company
        600 New Hampshire Avenue, NW
        Washington, D.C. 20037

        15.2.   Amendments: Entire Agreement. This Sublease may not be amended,
modified, or terminated, nor may any obligation hereunder be waived orally, and
no such amendment, modification, termination, or waiver shall be effective for
any purpose unless it is in writing, signed by the party against whom
enforcement thereof is sought. This Sublease is intended by the parties to be an
entire, complete and integrated statement of all their respective rights,
obligations and remedies with respect to the subject matter of this Sublease.
All prior and contemporaneous oral or written statements, representations,
warranties or agreements are superseded and merged in this Sublease.

        15.3.   Severability. If any provisions of this Sublease or any
application thereof shall be invalid or unenforceable, the remainder of this
Sublease and any other application of such provision shall not be affected
thereby.

        15.4.   Binding Effect. This Sublease shall be binding upon and inure
to the benefit of and be enforceable by the respective successors and assigns
of the parties hereto.

        15.5.   Captions. The table of contents, the Article headings, and the
Section headings are for convenience of reference only and shall not limit of
otherwise affect the meaning hereof.

        15.6.   Counterparts. This Sublease may be executed in counterparts,
each of which shall constitute an original and all of which shall be one and
the same document.

        15.7.   Governing Law. This Sublease shall be governed by and construed
in accordance with the laws of the District of Columbia.

        15.8.   Relationship of Parties. Sublessor and Sublessee shall not be
considered



                                       7
<PAGE>   8
or deemed to be joint venturers or partners and neither shall have the power to
bind or obligate the other except as set forth herein.

        15.9.   Default of Lessor's Trustee. In the event the Sublessor is
involved in any bankruptcy or insolvency proceedings and the Sublessor or the
Sublessor's trustee or receiver fails to perform any of the Sublessor's
obligations under this Sublease with the result that Sublessee is unable to use
the Premises for Sublessee's intended use, Sublessee shall have the option to
terminate this Sublease.

        15.10.  Construction. All terms used in this Sublease, regardless of
the number or gender in which they are used, shall be deemed and construed to
include any other number, singular or plural, and any other gender, masculine,
feminine, neuter, as to the context or sense of this Sublease or any section,
subsection, or clause herein may require as if such terms had been fully and
properly written in such number or gender.

        15.11.  Subordination to Overlease. This Sublease is and shall remain
subject to the terms of the Overlease.

        15.12.  Exculpation. Nothing herein shall be construed to impose any
liability on the officers, directors or shareholders of Sublessee and
Sublessor's sole recourse under this Sublease (absent fraud or willful
misconduct by such officers, directors or shareholders) shall be against
Sublessee and the assets of Sublessee.

        IN WITNESS WHEREOF, the parties have caused this Sublease to be
executed by their respective duly authorized officers as the 1st day of
January, 2000.

                                                DGB ENTERPRISES, INC.,
                                                SUBLESSOR


                                                By: /s/ MICHAEL A. D'AMATO
                                                   -----------------------
                                                Name:
                                                Title:



                                                THE ADVISORY BOARD
                                                COMPANY, SUBLESSEE


                                                By: /s/ JEFFREY D. ZIENTS
                                                   -----------------------
                                                Name:
                                                Title:

                                       8