News

Jan 06, 2024

This Week's D.C. Deal Sheet (June 6, 2023)

Government officials, community leaders and developers held a ribbon-cutting

Government officials, community leaders and developers held a ribbon-cutting Monday to mark the opening of the D.C. Department of General Services’ new headquarters at Ward 7's Northeast Heights development.

The six-story, 239K SF building at 2934 Minnesota Ave. NE is the first project to deliver from a strategy Mayor Muriel Bowser's office launched in 2019 to relocate government offices east of the Anacostia River in Wards 7 and 8.

"We understand how powerful the District's leasing power is for spurring economic growth," Bowser said in a release. "In fact, we know that the previous home of DGS – the Reeve's Center – was one of the original driving forces behind the transformation of the U Street and 14th Street corridors.

"Mayor Barry had that vision, and now we’re building on that vision to attract business and amenities to neighborhoods East of the River."

The $52.5M project was developed by a partnership between Asland Capital Partners, Trammell Crow and Goldman Sachs’ Urban Investment Group. Ground-floor retail and restaurants are also planned for development, and D.C.'s Department of Corrections plans to move its headquarters to the building at the end of June.

The offices are part of the larger Northeast Heights project, a redevelopment of two shopping centers that is also planned to include 1,500 residential units and 120K SF of retail. In October, Standard Real Estate Investments acquired a 13-acre piece of the Northeast Heights site that is planned for residential from Cedar Realty.

SALES

Bethesda-based Finmarc Management sold a two-story commercial office building in Springfield, Virginia, to Costco Wholesale for $6.55M in a deal that closed Monday, the firm announced. The nearly 27K SF property at 7375 Boston Blvd. was part of an 11-building office, industrial and data center portfolio in Springfield that Finmarc acquired from Boston Properties a year ago.

The building was vacant at the time Finmarc purchased it. H&R Retail's Geoffrey Mackler and NWAP II's Daniel Venable represented the buyer. Kelley Drye Warren's Joseph Hoffman provided legal services to Finmarc.

***

Aria Development Group purchased a five-story, 60K SF office building on a 20K SF parcel in Fairfax, Virginia, for $11.5M. The property at 4420 North Fairfax Drive sold in 2015 for nearly double that value, $21.75M.

"Dynamics in the current market made this property available at a significant discount to recent value and its long-term potential," Aria's Jay Lee said in a press release.

The property's tenants include Arlington Public Schools, chef-centric food marketplace Hungry, OrthoBethesda and EagleBank. The second and third floors of the building are vacant. Aria is pursuing the possibility of a daycare facility to occupy that space, and it has enlisted Cushman & Wakefield's Tim Summers in the search. The space recently held The Children's School, an education nonprofit serving the children of Arlington Public School teachers.

The developer also has an approved site plan for 245K SF of multifamily across 23 stories, which extends to 2028.

LEASES

St. John Properties landed leases with Excel Courier & Logistics and Fastsigns Herndon totaling 16K SF for its newest building at the Ashburn Crossing flex/research and development business park in Loudoun County. The leases account for 35% of the leasable space at 21240 Ashburn Crossing Drive, a single-story, 43,620 SF flex/R&D facility that is expected to deliver later this year. The park is made up of nine buildings with 350K SF of flex/R&D space.

St. John Properties’ Danny Foit represented the landlord in both transactions. KLNB's Chase Stewart represented Fastsigns Herndon, and Savills’ Leland Middleton represented Excel Courier.

***

Skanska signed law firm Cassidy Levy Kent for 11.5K SF at 2112 Penn, an 11-story Foggy Bottom office tower. With its newest tenant, the 230K SF building is 90% leased. Other tenants include law firm Cleary Gottlieb Steen & Hamilton, PWR, NERA Economic Consulting and Berry Appleman & Leiden. The Restaurant Association of Metropolitan Washington, Flower Child and North Italia occupy the ground-floor retail space.

"This lease, and our recent transaction with UBS Financial Services at 17xM, demonstrate the type of high-quality and tech-forward properties that companies are looking for, particularly in the current office market," Skanska Executive Vice President and Regional Manager Mark Carroll said in a release.

CBRE represented the tenant, and both Cushman & Wakefield and CBRE represented Skanska.

***

Silver Mirror Facial Bar inked its third lease in the District in Penn Quarter at 920 H St. NW. The 3K SF cosmetic services establishment plans to open June 8. Silver Mirror opened its first location in Dupont in 2019 and its second in Navy Yard in 2022. D.C. was its first move outside New York, where it has locations in the Flatiron District, the Upper East Side and Briant Park. Silver Mirror opened in Miami this winter. It plans to open three new locations by the end of the year, one in each of its existing markets. KLNB's Kim Stein represented Silver Mirror in the deal with Brookfield.

MILESTONES

Placemakr, formerly WhyHotel, announced two new locations in D.C., both launching this quarter. The management and hospitality operator is taking over management of Dupont Circle's historic Patterson Mansion, which was built in 1903 and was home to President Calvin Coolidge during a White House renovation in 1927. It was then renovated for multifamily in 2017. The 92-unit property has an event center that can hold up to 100 guests.

On the opposite side of the city, Placemakr is launching a pop-up extended-stay concept out of Coda on Half, a block from Nationals Park. Twenty-five units will be dedicated for the brand's hospitality venture out of the property, managed by MRP Realty.

FINANCING

Arlington Partnership for Affordable Housing secured $30.6M in tax-exempt bonds from the District of Columbia Housing Finance Agency for the construction of a 93-unit, all-affordable senior living development in Fort Totten.

The Fort Totten Senior Apartments will be restricted to individuals 62 and older with incomes up to 50% of the area median income, and 52 units will be restricted at 30% AMI. The project's amenities include free internet, meeting and exercise rooms, a lounge and wellness suite, a library and a community garden. D.C.'s Department of Housing and Community Development is providing $25.5M in construction financing from its Housing Production Trust Fund.

***

Clearwater Capital Management closed $17M in financing for the latest project at the Grimke School site in the U Street corridor: The Thread, a 38-unit building at 1966 9½ St. NW. The Commercial Observer first reported the dual-structure construction finance package, which includes a senior loan from City First Bank and a Commercial Property Assessed Clean Energy financing facility from Stonehill PACE.

PERSONNEL

Berkadia hired Brian Gould as a managing director out of the mortgage banking platform's D.C. Metro office. Gould will arrange loans and JV equity for commercial real estate owners and developers of multifamily, single-family rental, industrial, retail, office and self-storage, according to a press release.

Gould was at Chatham Financial for four years, leading a D.C.-area commercial real estate capital advisory team. Prior to that, he spent eight years as director of capital markets at JBG Smith.

"Over the course of my career, I’ve worked on dozens of CRE transactions with several of my new Berkadia teammates," Gould said in a statement. "I have always considered them some of the top-notch CRE investment sales and mortgage brokerage professionals in this market. I’m thrilled to now call them my colleagues."