KBR Building Group to Construct The Acadia in Arlington

By Adrian Maties, Associate Editor

Multi-family developer Kettler has selected the Charlotte, N.C.-based KBR Building Group to construct The Acadia at Metropolitan Park, a 411-unit mixed-use, residential building in Arlington, Va. It will be the third building in the multi-phase Metropolitan Park development located in Washington, D.C.’s Pentagon City area.

The 19-story Acadia is adjacent to The Millennium at Metropolitan Park (completed in summer 2010) and The Gramercy at Metropolitan (completed in 2008), the first two phases of the Metropolitan Park development. Both buildings have been constructed by the KBR Building Group and both have won awards for construction excellence.

Designed for LEED Silver certification, the Acadia will total 677,154 square feet. It will include three levels of underground parking and 16,350 square feet of retail on the first floor. The building will feature numerous amenities, such as a fitness center, a mailroom, a clubhouse, a business center, a private conference room for residents, a pet grooming room, bike storage and bike workrooms. A swim deck with saltwater system, a barbeque area, a club kitchen, shower rooms and a massage room are planned for the seventh floor, while the 19th floor will house a penthouse clubroom.

Dorsky Yue International is the architect of record. The building will have a granite and limestone skin and incorporate an enhanced acoustical package for the whole building. KBR’s regional office in Vienna, Va., is leading construction.

“We are excited about this most recent opportunity to participate in the construction of Metropolitan Park, having collaborated with the project’s developer, Kettler, since the inception of this important mixed-use development,” said Philip Southerland, president of KBR, in a release. “Our previous award-winning work at Metropolitan Park has contributed to KBR Building Group’s solid reputation for delivering top-quality, high-rise residential and mixed-use construction projects on time and within budget.”

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Photo credits: Dorsky Yue International

Ground Broken on Apartments in Fair Lakes

By Adrian Maties, Associate Editor

Balfour Beatty Construction, a leader in the U.S. commercial construction industry and part of the London-based Balfour Beatty plc, has started work on a new residential project in Fairfax for The Bainbridge Cos. and Chesapeake Realty Partners. Called the Fair Lakes Apartments, the project is expected to be completed in November 2013.

The 144,253-square-foot, urban infill Fair Lakes Apartments project will be developed on Fair Lakes Circle in Fairfax. The site is close to shopping, restaurants, I–66, Ox Road and Fairfax County Parkway. Dulles Airport is just 5 miles to the west.

Fair Lakes Apartments will be a six-story, wood-framed building with 150 units and three stories of underground parking. The Maryland-based SK&I architectural firm designed the u-shaped building to wrap around an outdoor pool and spa. Amenities also include a fitness room. The Fair Lakes Apartments will feature a façade of glass and brick, with metal and wood panels, and fiber cement siding.

Fifteen of the 150 units will be studio apartments. There will also be 89 one-bedroom units and 46 two-bedroom units. Apartment features include Hardwood plank–style flooring and kitchens with granite countertops, stainless steel finish appliances, and tile backsplashes. The rental apartment community is pet–friendly and also includes elevator access. It is designed to be compliant with National Association of Home Builders Green Building standards.

Apartment vacancies are dropping in the Washington DC metropolitan area, with the vacancy rate expected to end the year at 3.9 percent. According to Marcus&Millichap, multifamily  starts have jumped and represent more than 40 percent of all residential groundbreakings over the past year, approximately two times the typical proportion. The slight decline in vacancy this year confirms that the metro’s apartment sector is in a new phase, where a closer alignment in tenant demand and completions will maintain vacancy within a tight range.

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Photo credits: Chesapeake Realty Partners

Charts courtesy of Marcus&Millichap.

Vornado to Sell Three Reston Office Buildings for $126 Million

By Adrian Maties, Associate Editor

Vornado Realty Trust (VNO) continues to trim its portfolio. The New York-based real estate investment trust announced on October 29 that it has entered into an agreement to sell three office buildings located in suburban Fairfax County, VA, for  approximately $126 million or roughly $255 per square foot. Vornado has also reached a deal to sell another office building in downtown Philadelphia for $60 million.

The three Fairfax County properties are the Reston Executive Center buildings located at 12100, 12110 and 12120 Sunset Hills Road, in Reston, right in the heart of Virginia’s technology center. This 494,000-square-foot class A office park is within easy walking distance of the Reston Town Center and just minutes away from restaurants, shops and banking, as well as Tysons Corner. It offers easy access to the Dulles Toll Road, the Capital Beltway, Fairfax County Parkway, Route 28 and Dulles International Airport.

Vornado sold the complex to an undisclosed buyer. The company expects to complete the sales of the Fairfax and Philadelphia properties in the fourth quarter of 2012. It also expects these two transactions to result in total net proceeds of approximately $89 million after repaying an existing loan and closing costs. The gain will be about $70 million.

Marcus & Millichap reports that properties sold in the Washington, DC Metro Area over the past year carried a median price of $253 per square foot, marking a seven percent increase over the prior year. In 2008, at the peak of the market, the median price reached $290 per square foot. Over the past 12 months, transaction velocity surged 20 percent. It’s been a busy past week for the Washington, DC office market. Commercial Property Executive reports that CNN’s 11-story Washington, DC headquarters building was recently sold for $107 million. Click here to read the full story.

                                                  Charts courtesy of Marcus&Millichap.

                                                  Photo credits: Vornado

George Washington University to Build New 850-Bed Residence Hall

By Adrian Maties, Associate Editor

The George Washington University, the largest institution of higher education in the District of Columbia, plans to build a new, $130 million residence hall to meet the rising demand from students looking to live on the Foggy Bottom campus. The project was approved by the George Washington University board of trustees on Friday, Oct. 19.

The new dorm will bring 850 beds to the Foggy Bottom campus. It will be developed mid-block between 21st and 22nd streets on H and Eye streets and will incorporate new construction with the front portions of three existing residence halls constructed in the mid-1920s: the West End, Schenley and Crawford.

Students will be able to live in two-bedroom, studio or affinity housing units. The building will serve mostly students in their second and third years, but some units are set aside for professional staff and faculty participating in George Washington’s faculty-in-residence program. Plans also include 64,000 square feet developed for student-related activities, meeting space and retail space. The residence hall is expected to be completed before the start of the university’s fall 2016 semester.

“The new building provides an opportunity to enhance the university’s student housing inventory to meet the needs of our students and further our efforts to build our residential communities as outlined in the strategic plan,” said Alicia Knight, GWU senior associate vice president of operations.

The George Washington University has big plans for its Foggy Bottom campus. The day before the board’s approval, it broke ground on a 35,000-square-foot museum right in the heart of the campus. It will be custom built and located at G and 21st streets. The George Washington University Museum will be home to Washington’s 87-year-old Textile Museum, the Albert H. Small Washingtoniana Collection and the university’s fine art collection. It is scheduled to open to the public in fall 2014.

Photo credits: The George Washington University.
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Northwestern Mutual Provides Cathedral Commons with $91M in Financing

By Adrian Maties, Associate Editor

A joint venture between Giant of Maryland and the Bozzuto Group has managed to secure $91 million in construction and permanent financing for Cathedral Commons, a mixed-use development in Northwest Washington, D.C.  The Greenbelt, Md.-based Bozzuto Group started work on the project earlier this month.

The four-acre Cathedral Commons development is located at 3336 Wisconsin Ave., N.W., between Macomb Street and Idaho Avenue, bordering the Cathedral Heights and Cleveland Park neighborhoods. The Bozzuto Development Co. is building the $130 million project in a joint venture with Southside Investment Partners and Giant Food of Landover, Md.

Cathedral Commons totals 264,272 square feet. When finished, it will deliver 137 apartments, eight townhomes, 128,000 square feet of retail and more than 500 parking spaces. These will all be centered around a state-of-the-art, 56,000-square-foot Giant supermarket with full-service floral, bakery, meat, seafood and deli departments. Giant Food is the grocery market-share leader across the Washington metropolitan region. H&R Retail is leasing the remaining prime street-front retail space.

The residences of Cathedral Commons are scheduled to deliver in fall 2014. They will feature such high-end amenities as a boutique hotel-style lobby, lounge areas and library, a fitness center, a clubroom with bar, residential courtyards and a rooftop deck.

The project’s general contractor is the Bozzuto Building Co.. The Bozzuto Management Company will manage the apartment homes. Mark Remington and Daniel McIntyre of Holliday Fenoglio Fowler represented the joint venture and worked to secure the 13-year, fixed-rate loan provided by Northwestern Mutual.

“Through Cathedral Commons, we will create in Northwest Washington, D.C., a mixed-use community where residents can enjoy a wealth of conveniences just outside their front door,” said Tom Bozzuto , CEO of The Bozzuto Group. “We are honored to have the opportunity to help bring to fruition a new vision of urban community planning and development to the District of Columbia.”

Photo credits: The Bozzuto Group

140-unit Cambria Suites Hotel Coming to Downtown Rockville

By Adrian Maties, Associate Editor

Rockville Town Square, in downtown Rockville, has added an ice-skating rink, a public library, 180,000 square feet of shops, restaurants and a grocery store in recent years. And there’s still more to come. Work will soon start on a vibrant, mixed-use development that will replace a surface parking lot in the heart of Rockville Town Center, approximately eight miles outside of Washington, D.C. Montgomery County and Rockville officials announced their support for the project on Monday, Oct. 8.

Choice Hotels International and Reston, Va.-based Duball L.L.C. are working on the Rockville Town Center project. They plan to transform the surface parking lot in front of Regal Cinemas, at East Middle Lane and Monroe Street, into two mixed-use, high-rise towers with 485 multifamily homes, a 140-room Cambria Suites hotel, 40,000 square feet of street-level retail and approximately 1,000 parking spaces. To help jump-start the project, a $4.2 million conditional grant must be approved by the county council.

Work is expected to start on the first phase by the end of the year. It will include 223 apartments and 40 additional units earmarked as moderately priced dwelling units. The first phase will also include the 140-room Cambria Suites hotel and 17,000 square feet of street-level retail, plus public and private parking.

Rockville Mayor Phyllis Marcuccio thinks ”the hotel is a central component to this next, major mixed-use project in the downtown, and it, along with the new residential and retail development, will help boost our local economy and add another top-notch dimension to an already thriving town center.” She may just be right. Marcus & Millichap reports that room demand rose in the Northeastern United States in the first half of 2012, with the estimated year-to-date occupancy in the region reaching 62 percent.

“On weekends, downtown is thriving, thanks to the partnership between the city of Rockville, Montgomery County and the state of Maryland. Choice Hotels joined this transformation by building its headquarters here and now; with the addition of a new hotel, both Choice franchisees and visitors to the area will be able to stay in downtown Rockville,” said county council member Phil  Andrews.

Photo credits: Duball L.L.C.

Charts courtesy of Marcus&Millichap.

Apartments Break Ground in Hyattsville; Continental Realty Buys Sterling Apartment Building

By Adrian Maties, Associate Editor

Grady Management Inc., a full-service residential, commercial and real estate consulting firm, started construction last month on a new luxury apartment building in Hyattsville, Md. Prince George’s County executive Rushern Baker, county councilman, Will Campos and Hyattsville Mayor Marc Tartaro attended the groundbreaking ceremony, along with several other members of the local government,  community members and Grady officials.

The mid-rise multifamily building will be named 3350 at Alterra. It is located along Toledo Terrace and is just the first phase of a mixed-use, planned redevelopment of a half-century-old rental complex called Belcrest Plaza. The project will bring 283 studio, one-, two- and three-bedroom apartment homes to Hyattsville. Also included are a cyber cafe, lounge, game room, pool and fitness center, as well as garage parking and bike storage.

Just steps from the Prince George’s Plaza Metro, the new apartments are expected to offer much to the community. Baker said the project ”fits into our vision of transforming neighborhoods in Prince George’s County,” while Jonathan Genn, executive vice president & general counsel for Contee Company L.L.P., called it a ”legacy project.”

In other news, Baltimore-based Continental Realty Corp. announced the acquisition of Chase Heritage, a 236-unit apartment community in Sterling, Va., for about $42.5 million, or $180,000 per unit. The purchase was made on behalf of a real estate fund sponsored by one of the company’s affiliates. Cushman & Wakefield Inc.’s Anthony Liberto and Jeff Pacey represented the seller, ML Casa II L.P., in the transaction.

Chase Heritage was built in 1986 and is located approximately 30 minutes from Washington, D.C., near the Dulles International Airport and Dulles Town Center. It includes one-, two- and three-bedroom apartments, as well as a swimming pool, a community center and a range of recreational areas.

This is the fund’s fourth transaction in the past 18 months and the second apartment community acquired in the Northern Virginia marketplace. The other three properties are:

• The 189-unit Parkwood Court apartment complex in Alexandria, Va.;
• The Shops at Verandah, a 73,000-square-foot retail center in Fort Myers, Fla.;
• A 30,500-square-foot shopping center in Royal Palm Beach, Fla.

Photo credits: GRADY MANAGEMENT, INC.

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New NYU Academic Center Opens–in Washington, DC

By Adrian Maties, Associate Editor

New York University, the world’s first Global Network University, opened a new academic facility in Washington, D.C., on Sept. 24. It will give NYU students a chance to study “abroad” (or “study away,” as the case may be) in the nation’s capital. NYU president John Sexton and board of trustees chair Martin Lipton welcomed students, faculty and donors at the ribbon-cutting ceremony on Monday evening.

Dubbed the ”Constance Milstein and Family Global Academic Center,” the 75,000-square-foot facility is located at 1307 L St., N.W., near Thomas Circle, and will provide a home away from home for faculty and researchers traveling to Washington, as well as a gathering space for NYU alumni in the area. It includes state-of-the-art classrooms, dorm rooms, faculty offices and residential space, as well as research space and a 140-seat auditorium. The building will ultimately house 120 students per semester. The curriculum will focus on government, politics, public administration and journalism, among other fields.

Hickok Cole Architects designed the facility. Work on the project started in December 2010. It was finished this month. NYU is now applying for LEED Silver certification for the building.

NYU Washington DC was built on land donated by Ronald Abramson, a shareholder in the firm of Buchanan Ingersoll & Rooney. The land was valued at $5 million. Abramson was one of the project’s major donors, together with  Constance Milstein, principal & co-founder of Ogden CAP Properties L.L.C. Milstein donated $10 million for the construction of the building.

NYU is one of the largest private universities in the United States and sends more students to study aboard than any other U.S. college or university. The Constance Milstein and Family Global Academic Center joins 13 other NYU-operated academic sites in Africa, Asia, Australia, Europe, the Middle East, and North and South America. Sexton called the new site ”an indispensable addition to NYU’s global network.”

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Image courtesy of NYU.

Insight Buys Site Near Huntington Metro with Plans for Work $52M Apartment Project

By Adrian Maties, Associate Editor

Insight Property Group L.L.C., a multifamily developer founded by longtime multifamily industry veterans Richard Hausler and Michael Blum in late 2009, on Sept. 11 announced the acquisition of 3.4 acres of land in the Alexandria section of Fairfax County, Va. It plans to use the site for a new metro-oriented luxury apartment project.

Called Huntington Metro, the project will cost $52 million. Insight plans to start construction in the fourth quarter of 2012. When finished, the project will deliver 240 luxury apartments, as well as ground-floor retail and parking. Residents will enjoy such top-tier amenities as a resident lounge and clubroom with kitchen and billiards, a business center, wireless Internet connectivity, an outdoor pool, a state-of-the-art fitness center and intensely landscaped courtyards and grounds. The building is expected to be finished in mid-2014.

The site is located near the intersection of Route 1 and North Kings Highway, just south of the Huntington Metro Station. It took Insight almost two years to obtain a change to the county’s Comprehensive Plan and a rezoning of the property for the project.

“We worked very closely with Supervisor Jeff McKay’s office, county staff and our neighbors to design a high-end residential project,” said Insight Development partner Trent Smith. “This project will be a visible gateway to Richmond Highway and a source of pride and distinction for the neighborhood.”

Insight Property Group has been very active in the D.C. Metro area multifamily market, a place where rents are growing and vacancies are dropping. It will finish its Grayson Flats Apartments in Arlington this fall and will start work on a 310-unit luxury apartment project in early 2013 in Silver Spring. The company will also redevelop the Metro Rosslyn Apartments in Arlington, Va., and has also purchased 572 existing apartments in four other locations in the Washington, D.C., metropolitan area. With the high demand for apartments in the D.C. area, Insight is investing smart and answering a need.

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Charts courtesy of Marcus&Millichap.

Rendering courtesy of Insight Property Group.

Apartment Communities Sell in Metro Area

By Adrian Maties, Associate Editor

Investors are looking to capitalize on the high demand for apartments in the Washington, D.C., metro area. From affordable housing to luxury condos, apartment communities have been seeing a lot of activity. In the past week, two apartment complexes sold in the Washington, D.C., metro area, totaling 1,005 units.

One of the properties is the Grosvenor Tower, located in North Bethesda, near the Grosvenor Metro Station on Grosvenor Place. It was purchased by a partnership led by Archstone, one of the largest owners of high-quality apartment communities in the United States.

The property will be renamed Archstone Grosvenor Tower. Amenities include a 24-hour fitness center with a pilates/dance room, a swimming pool with sundeck, a business center and a walking/biking trail with direct access to the Metro. The apartments feature granite countertops, maple cabinetry, stackable washers and dryers, wood-plank flooring in the living rooms and balconies. The high-rise apartment community is ideally positioned to offer its tenants a wide variety of high-end retail, food and entertainment options.

The second property is the Hamptons at Town Center, located at 19757 Crystal Rock Drive, in Germantown, Md., an important part of the Washington, D.C., metro area. The 768-unit complex was built between 1979 and 1982, and recently underwent a capital improvements program. Its amenities include a fitness center, clubhouse, business center, pool, sports courts and laundry facilities.

Montgomery County acquired The Hamptons at Town Center for $90.3 million. CBRE Group’s Bill Roohan, Michael Muldowney, Michael Rudolph, Brian Margerum, Andrew Boyer and Martha Hastings represented the seller, Harbor Group International. Harbor Group will continue to manage the property. The Hamptons at Town Center is approximately 97 percent occupied.

A Marcus & Millichap report released for the third quarter of 2012 says the heightened competition for assets across the metro has supported an 8 percent bump in the median price of properties sold over the past year to $101,500 per unit. The median price rose 3 percent in the district, to $82,600 per unit. The report also says that greater access to financing for qualified borrowers and highly competitive bidding for most properties will sustain an active and liquid market.

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Image courtesy of http://www.myhgmc.com.

Chart courtesy of Marcus&Millichap.

HFF Closes $121.4M Carroll Square Leasehold Sale

By Adrian Maties, Associate Editor

Holliday Fenoglio Fowler L.P. it has closed the leasehold sale of downtown Washington, D.C.’s Carroll Square. HFF represented the seller, Seaton Benkowski & Partners. The property was acquired by Munich-based GLL Real Estate Partners for $121.4 million. The German real estate investment advisor has also assumed an existing loan on the property.

Carroll Square is located at 975 F St., N.W., in the heart of downtown Washington’s East End neighborhood. It is a 178,000-square-foot, Class A office property that stands 10 stories high. According to its Web site, the property is fully leased and is home to major law firms, investment and communications companies, and government affairs offices. The Archdiocese of Washington, D.C.; Seyfarth Shaw; Holland & Hart; Fitzpatrick, Cella, Harper & Scinto; Le Pain Quotidien; Leica Camera; and Coco Sala are some of its tenants.

The building offers its tenants unique office and retail opportunities. It features new construction as well as seven late 19th century commercial townhomes. Carroll Square also includes a small, 700-square-foot public art gallery, three rooftop terraces and a “pocket park” located between the office building and St. Patrick’s Catholic Church to the north. Five different Metro lines are within walking distance of the property. Gallery Place, the Verizon Center and the New Convention Center are also close by.

SBP partnered with Akridge in the development, leasing and management of Carroll Square. The building was designed by SmithGroup and was completed in 2007. At that time, the Maryland/DC Chapter of the National Association of Industrial and Office Properties (NAIOP) recognized it as the “Best Urban Office Building” of the year. It also received the Associated Builders and Contractors Award of Excellence for a Preservation Project, and was presented with the Mayor’s Award for Historic Preservation.

Managing director Stephen Conley and senior managing directors Jim Meisel, Dek Potts and Andrew Weir led the HFF team that represented Seaton Benkowski & Partners. They were supported by real estate analysts Matt Nicholson and Jessica Dickinson.

Image courtesy of Akridge.

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First Potomac Sells Stake in 1200 17th St., N.W., for $43.7M

By Adrian Maties, Associate Editor

First Potomac Realty Trust last week announced the sale of its 95 percent stake in 1200 17th St., N.W., in downtown Washington, D.C., for $43.7 million as part of a larger analysis of its development pipeline. First Potomac acquired the property in a joint venture with Akridge from the National Restaurant Association for $37.6 million in October 2011.

Douglas Donatelli, chairman & CEO of First Potomac, stated that the “sale allows us to achieve our previously stated goals of monetizing an investment after we have added value, significantly strengthening our balance sheet and decreasing risk in our portfolio.” According to the Bethesda-based real estate investment trust, it believes 1200 17th St. will be a successful development but could not pass on the opportunity to sell. First Potomac will now focus on other projects, like the redevelopment of 440 First St., N.W., expected to be completed in mid-2013.

Buyer Mitsui Fudosan America, the U.S. subsidiary of Japan’s largest real estate company, partnered with Akridge on The Homer Building at 601 13th St., N.W., in January and Mitsui Fudosan on 700 Sixth St. and 1090 Vermont Ave. in the past, according to Citybizlist.com.

The new partners will work together to complete the trophy-class office building in D.C.’s central business district, according to a press release. The project calls for the current building to be demolished and replaced with a new, 168,000-square-foot trophy asset on the same high-demand site, near the red, blue and orange Metro lines. According to First Potomac, Akridge will continue to own its portion of the project and will remain the developer.

The building will be LEED Platinum certified, with glass on all four sides, expansive ceiling heights, broad column spacing, a rooftop terrace and a fitness center. The project is expected to be finished in the fourth quarter of 2014.

“Partnering with Mitsui Fudosan ensures that we are able to keep this project moving forward with the great momentum that First Potomac has lent thus far,” said P. Brian Connolly, Akridge’s senior vice president of leasing and acquisitions.

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Image courtesy of Akridge.

Kreiger JV Buys Villas at Langley; Grady Management Prepares to Start M-F

By Adrian Maties, Associate Editor

Sawyer Realty Holdings sold the Villas at Langley, an apartment complex in Hyattsville, to Krieger Boulevard L.L.C. and Krieger Skyline L.L.C. The cost of the transaction was $48 million, or about $81,000 per unit. Transwestern’s Mid-Atlantic multifamily group represented the seller.

The Villas at Langley is a 590-unit complex located at 8100 15th Ave. It was built in 1964 and features one-, two- and three-bedroom apartments. Amenities include laundry facilities in every building, separate adult and toddler pools, a soccer field, a basketball court and playgrounds. The 504,000-square-foot property is close to the University of Maryland at College Park, downtown Silver Spring and the Federal Research Center at White Oak.

In other real estate-related news, Grady Management Inc., a full-service, residential and commercial real estate consulting firm based in Silver Spring, announced plans to break ground this September on a new luxury apartment building in Hyattsville, Md. The residential project will be named 3350 at Alterra. It represents the first phase of a mixed-use redevelopment of the former Belcrest Plaza.

3350 at Alterra will feature 283 apartment homes and will be located along Toledo Terrace, near Prince George’s Plaza Metro. 3350 at Alterra will include studio, one-, two- and three-bedroom apartments and offer its residents such amenities as a cyber cafe, a lounge, a game room, a pool, a fitness center, garage parking and bike storage. Grady Management has scheduled the ground breaking for Sept. 14.

Demand for apartments is high in the Washington, D.C., metro area. According to a report released by Marcus & Millichap for the third quarter of 2012, multifamily starts have jumped and represent more than 40 percent of all residential groundbreakings over the past year, approximately two times the typical proportion. Vacancy rates continue to decline and will drop to 3.9 percent this year. Thus, average asking rents will rise 4 percent to $1,467 per month in 2012 and effective rents will advance 4.7 percent to $1,401 per month. However, according to The Washington Post, 6,000 new units are expected to be delivered by the end of the year.

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Charts courtesy of Marcus&Millichap.

Photo of the Villas at Langley courtesy of The Villas at Langley.

D.C.’s Westory Building Changes Hands

By Adrian Maties, Associate Editor

An open-ended fund managed by Deka Immobilien Investment GMBH of Germany recently sold the Westory Building to New York Life Insurance Co. for $159.4 million, or $590 per square foot. Carr Properties negotiated the transaction. Savills L.L.C. advised the open-ended property fund managed by Deka in the sale.

The Westory was developed in 1990 and renovated in 2002. It is an expansion of the original Westory Building, which opened in 1908. At that time, it was considered one of the most beautiful office buildings in the Eastern United States. The new structure completely enveloped the old building. Shalom Baranes Associates PC was the architect.

The high-rise building stands 11 stories and is located at 607 14th St., N.W., near the White House in the heart of D.C.’s East End neighborhood. It is D.C.’s first multi-tenant office building to receive LEED for Existing Buildings: Operations & Maintenance Gold recertification and has been submitted for inclusion in the National Register of Historic Places. The Westory totals 270,158 square feet and includes such amenities as a fitness center, roof terrace and parking.

Carr Properties will handle property management responsibilities going forward. According to the company, the Westory is 92 percent leased and includes such major tenants as Kilpatrick Stockton L.L.P.; Rothwell, Figg, Ernst & Manbeck, P.C.; Hill & Knowlton Inc.; and Public Strategies Inc.

The building’s location offers its tenants proximity to a number of federal agencies, associations, professional services, consultants and high-tech firms, as well as many points of interest and services including dining, retail and entertainment amenities. The Smithsonian museums, many national monuments, The Verizon Center, The Warner Theatre, Ford’s Theatre, National Theatre and The Spy Museum are all within walking distance.

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Image courtesy of http://planning.dc.gov.

Clark Awarded $215M Inova Women’s Hospital & Children’s Hospital Construction Contract

By Adrian Maties, Associate Editor

The Clark Construction Group recently announced its selection by Inova Health System to build the 665,000-square-foot Inova Women’s Hospital & Children’s Hospital, the largest phase of its capital improvement program. Clark is currently the top-ranked general contractor in Modern Healthcare’s Construction & Design Survey, with more than $1 billion in healthcare revenue in 2011.

The new hospital will stand 12 stories high. It will have 192 patient rooms on four floors, a 108-bed neonatal intensive care unit, 33 labor and delivery rooms, six C-section suites and eight operating rooms. Support areas, a ground-floor clinic and a kitchen will also be constructed.

Three of the building’s floors will be home to the Inova Children’s Hospital, which will include 116 private rooms and a dedicated entrance. The entire facility will be connected to the campus’ existing South Patient Tower on the lower three levels.

An architectural precast skin with glazed curtain wall and ribbon windows will wrap the new building’s cast-in-place concrete structure. The hospital will also feature custom entry canopies, green roofs and a healing garden.

Clark Construction will also build a new central utility plant and a central energy plant with two 1,800-ton chillers, cooling towers and 13 custom air handling units, which will provide 3,300 tons of added cooling load. Three two-megawatt emergency generators with paralleling gear will provide the hospital with continuous energy in the event of an emergency.

Wilmot Sanz Inc. of Gaithersburg, Md., is the project’s architect, Rockville, Md.-based Cagley & Associates is the structural engineer and Baltimore-based RMF Engineering is the MEP engineer.

The entire contract is worth $215 million. It is part of Inova Health System’s multi-year effort to turn its campus in Fairfax, Va., into a world-class environment for patient care, education and research. Construction will begin in September. The project is scheduled for completion in September 2015.

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Rendering courtesy of Clark Construction.

Vornado Sells Washington Properties

By Adrian Maties, Associate Editor

Vornado Realty Trust (NYSE:VNO) announced on July 5 it will sell its office building located at 409 Third St., S.W., in Washington, D.C. The price is $200 million and will result in net proceeds of $186 million and a net gain of $120 million.

On the same day, Vornado also disclosed that it has agreed to sell the Washington Design Center, the Boston Design Center, the L.A. Mart and the Canadian Trade Shows. The company sold all these assets to help fund the purchase of retail space on New York’s Fifth Avenue, the world’s priciest shopping corridor. (For more on Vornado’s acquisition of the 41-story, 1.5 million-square-foot office building at 666 Fifth Aven., at a price tag of $707 million, click over to Vornado Buys, Sells–and Pulls Back Its Veil, an article by Commercial Property Executive’s Barbra Murray.)

Known as the Washington Office Center, the building at 409 Third St. is adjacent to the Washington Design Center, an historic brick warehouse constructed in the 1920s and expanded in the 1980s. It is also being sold to the same buyer, a buyer whose identity has not yet been disclosed. Vornado Realty Trust has owned both buildings since 1998, when it purchased a 5.3 million-square-foot commercial real estate portfolio from the Kennedy family for approximately $625 million.

The Washington office tower has nine floors and 420,000 square feet of space. Its amenities include a cafe, fitness center, print shop and bank. All tenants and visitors can park their cars in a  four-level garage with 425 spaces. The first level of the garage also includes bike racks. The General Services Administration is its anchor tenants. It signed a 254,000-square-foot lease for the Small Business Administration this January.

The sale of the 22-year-old Washington Office Center is subject to customary closing conditions. Vornado expects to close it in the third quarter of 2012.

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Image courtesy of http://www.vornadocharlesesmith.com.

Joint Venture Buys Alexandria Residential Portfolio for $125.5M

By Adrian Maties, Associate Editor

The Praedium Group, a privately held real estate investment firm based in New York, has formed a joint venture with The Milestone Group, a Dallas-based multifamily real estate investment and management company, to buy the Alexandria Portfolio, a 556-unit multifamily portfolio in Alexandria, Va. The unknown seller was represented by Randal Howard of Moran & Co.

Christopher Hughes, principal of The Praedium Group & head of acquisitions in the Northeast region, stated in a press release that “this is an attractive acquisition for us, given the portfolio’s location in one of the strongest submarkets in the country, with a diverse job base and exceptional growth potential.”

The joint venture paid $125.5 million to acquire the portfolio. It consists of two apartment complexes, Edgeware Lane and Palladium Court. They are both located near the Kingstowne Village Parkway, 14 miles outside Washington, D.C., and within three miles of the Franconia-Springfield and Van Dorn Metro stations. They are also near several major interstates, including I-495, I-95 and I-395.

Edgeware Lane is a 424-unit complex comprising 16 buildings. Palladium Court comprises 132 units in five buildings. Almost half of the one- and two-bedroom units have undergone interior renovations, including upgrades to their kitchens and living areas. Many feature bonus spaces like dens, lofts and sunrooms. Edgeware Lane and Palladium Court also include clubhouses and outdoor pools.

The Alexandra portfolio is located in one of Washington, D.C.’s most desirable suburbs, a heavily populated area and a major hub for economic activity, with a diverse job base, rapidly growing technology and international business sectors and an unemployment rate well below the national average at 4.2 percent. The portfolio is also located within the jurisdiction of the Kingstowne Residential Owners Corporation. Residents thus have access to three community centers, two fitness centers and two outdoor pools. They are also near Kingstowne Towne Center, a 230,000-square-foot mixed-use shopping center with large anchor retailers, a movie theater and restaurant chains.

“We are pleased to be partnering with Praedium on this exciting transaction and to continue to expand the Milestone footprint in the mid-Atlantic region,” said Rob Landin, managing partner of The Milestone Group.

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Satellite image of Palladium Court courtesy of Google Maps.

Silver Spring’s Station Square Sold for $120.6M

By Adrian Maties, Associate Editor

Brandywine Realty Trust announced on Monday, June 25, that its Brandywine-AI Joint Venture has agreed to purchase three office properties in Silver Spring, Md. The acquisition price for the three-building portfolio was $120.6 million, or $241 per square foot. 

Known as Station Square, the portfolio totals 499,395 square feet. It consists of 1100 and 1010 Wayne Ave., along with 8484 Georgia Ave. The three buildings are located in Silver Spring’s CBD, across the street from the recently renovated transit center.

1100 Wayne Ave. is known as The Colonnade at Station Square. The  162,832-square-foot building was constructed in 1982 and is 89 percent leased. 8484 Georgia Ave.,  The Plaza at Station Square, was built in 1984. The 139,900-square-foot property is 94 percent leased. 1010 Wayne Ave. was built in 1987. Known as The Atrium at Station Square, it totals 196,663 square feet and is 96 percent leased.

The seller is a joint venture between Urdang’s Value-Added Fund II and Moore&Associates. Urdang is the real estate investment management subsidiary of BNY Mellon, while Moore&Associates is a Bethesda-based full-service commercial real estate investment, development and management firm. Moore&Associates developed the Station Square office complex and sold it in 2005, only to repurchase it in 2009 with the help of Urdang Value-Added Fund II L.P.

The purchasers secured $66.5 million of non-recourse property financing with a maturity date of July 2019 and an interest rate of 3.22 percent. Subject to customary closing conditions, the acquisition and related financing are scheduled to close on July 10, 2012.

“We are excited that our venture is acquiring three well-located and metro-served assets in Silver Spring’s CBD at a significant discount to replacement cost,” Gerard Sweeney, Brandywine’s president & CEO, said in a press release. With the new acquisition, the venture’s portfolio will now comprise six office buildings totaling 1.1 million square feet and located on or inside the Beltway in the Washington, D.C., Metro area.

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Photo of The Atrium at Station Square courtesy of Moore&Associates.

$75M Luxury Apartment Project Comes to Wheaton, MD

By Adrian Maties, Associate Editor

After six years of planning, the Washington Property Co. has finally started work on Solaire-Wheaton, a $75 million luxury apartment development in Wheaton, Md. The project was put on hold during the recession.

WPC is constructing the Solaire-Wheaton on the site of the former First Baptist Church of Wheaton, adjacent to the Westfield Wheaton Mall. The company purchased the 50-year-old building and its land in 2005. It also helped the church, renamed Streams of Hope,  relocate to Olney.

The 232-unit luxury apartment community is located just two blocks from the Wheaton-Glenmont station on Metrorail’s Red Line. Sixty percent of the units will be one-bedroom apartments, while 30 percent will be two-bedrooms and 10 percent will be studios.

Atlanta-based The Preston Partnership designed the project, expected to achieve a LEED certification. It will offer its tenants modern features such as stainless steel appliances, granite countertops,  wood laminate flooring, fine cabinetry and large windows and balconies. The new building will have a cyber café, a swimming pool, a fitness center, a business center, as well as a lounge with billiards, bar, indoor and outdoor fireplaces and a variety of games.

“The groundbreaking of Solaire-Wheaton marks another step in the ongoing revitalization occurring in downtown Wheaton,” said Daryl South, senior vice president of development.

RBS Citizens Bank provided financing for the project. The Clark Builders Group is the general contractor, while property management and leasing services will be provided by Gables Residential. WPC experts to start leasing in September 2013.

“The recession put a hold on our plans for several years, but now Wheaton is turning a corner, with more than 1,000 new apartments built or in the pipeline, a new Safeway and Costco, and planned relocation of the Maryland National Capital Park and Planning Commission offices.” said Charles Nulsen III, the company’s president.

Bethesda-based Washington Property Co. is a full-service commercial and residential real estate firm established by Nulsen. Its services include acquisitions, land use, development, property management, leasing and construction management. In May, the company completed a 295-unit apartment high-rise in Silver Spring called the Solaire-Silver Spring.

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Image courtesy of http://www.washproperty.com.

Kettler Launches New Format in Growing D.C. Rental Market

By Adrian Maties, Associate Editor

As the Washington, D.C., apartment market continues to grow–with vacancy rates dropping and rents rising–some developers are trying to take advantage of the favorable climate. Among them is Kettler Inc., a McLean-based company that just announced plans to launch its new m.flats format when it breaks ground in August on its first residential high-rise in the District.

The $80 million mixed-use project, announced last fall, is located in D.C.’s Mount Vernon Triangle neighborhood, one of the fastest-growing submarkets in the city. Its proximity to the White House and Capitol Building make it very attractive. Kettler plans a 13-story luxury apartment building there, at 450 K St., N.W. It will feature 233 apartment units, including studio, junior one-bedroom, one-bedroom and two-bedroom units, as well as approximately 6,000 square feet of retail, reported Citybiz Real Estate.

The new m.flats format focuses on efficient designs and includes fewer two-bedroom units than Kettler’s Metropolitan brand, although it includes a range from studios to two bedrooms. Amenities include lounge and common areas that encourage residents interaction. The new building will include about 85 percent studios and one-bedrooms, with an average rental size of 670 square feet. Designed by R2L: Architects P.L.L.C., it will be smoke free and aims to achieve a minimum LEED Silver certification. It will also feature a contemporary living room with indoor and outdoor fireplaces, a fitness center and a rooftop pool with grills and space for gatherings.

A recent market report by Marcus & Millichap shows a recovering Washington, D.C., metro apartment market. Still under the shadow of the last housing crisis, people now prefer to rent, rather than buy. The metrowide vacancy rate decreased 20 basis points in the first quarter of 2012, to 4 percent, as more than 1,300 rentals were absorbed during the period; it is expected to continue its decline throughout the year. Asking rents have gone up during the January-to-March period, recording a 0.6 percent increase, to $1,419 per month, while  effective rents gained 0.7 percent to $1,347 per month.

Kettler took over the project from the D.C.-based Douglas Development Corp. and is not the only developer in the region. Quadrangle Development Corp. and the Wilkes Co. plan a 234-unit rental building on the same block, at 440 K St., N.W.

Photo courtesy of http://mountvernontriangle.org/.

Charts courtesy of Marcus & Millichap.