Tanger, Peterson Cos. to Develop Upscale Outlet Center in Clarksburg

By Adrian Maties, Associate Editor

Greensboro, N.C.-based REIT Tanger Factory Outlet Centers Inc. and The Peterson Cos., one of the largest privately owned real estate development companies in the Washington, D.C., region, on April 16 announced they have joined forces to bring a new, upscale outlet center to the Washington, D.C., metro area.

The new outlet center will be branded as a Tanger Outlets. It will be located at the interchange of I-270 and Stringtown Road in Clarksburg, Md., 27 miles northwest of Washington, D.C., and 36 miles west of Baltimore. Currently, the outlet center is in the pre-development stage.

Tanger Outlet Centers and The Peterson Cos. will co-own the property. The two companies will provide site development and construction supervision services. Tanger will also manage, lease and market the retail space. For the time being, the developers have not released any information regarding the project’s cost or size.

“This partnership with Peterson Cos. is strategically designed to deliver a world-class outlet center to this exciting Mid-Atlantic market. We believe this new Tanger Outlet Center will be a must-visit value destination and an exceptional experience for our shoppers,” said Steven Tanger, Tanger’s president & CEO, in a statement to the press.

“We have a strong track record of creating dynamic lifestyle centers in Montgomery County, and we are excited about the opportunity to incorporate Tanger Outlets into our vision for a dynamic mixed-use project that Clarksburg will be proud of,” added Taylor Chess, senior vice president of retail for Peterson Cos.

Tanger Outlet Centers and The Peterson Cos. are also jointly developing Tanger Outlets National Harbor, on which they broke ground in November. The  $100 million center is one of the largest economic development projects in the county and will create an estimated 600 jobs during construction and almost 1,000 full- and part-time retail jobs upon completion. With 350,000 square feet of retail space, it is expected to open for the 2013 holiday season and will be home to more than 80 retailers. According to Marcus & Millichap, this year the Washington, D.C., metro area planned store openings will reach a three-year high.

Photo credits: The Peterson Cos.

Charts courtesy of Marcus & Millichap.

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The District, Woodvale Apartments Change Hands as D.C.’s Apartment Market Heats Up

By Adrian Maties, Associate Editor

Apartments in the Washington, D.C., metro area are selling fast and for a lot of money. Just this past month, investors paid close to $1 billion for properties totaling around 3,500 units.

The District apartments at 14th and S streets, N.W., and Silver Spring’s Woodvale Apartments are just the latest names on the list. According to the Washington Business Journal, The District apartments sold for $76 million, or roughly $608,000 per unit, while the Woodvale Apartments traded for $53.2 million, or roughly $141,489 per unit.

The JBG Cos. was the owner and developer of The District. The Chevy Chase-based company sold the complex less than a month after finishing construction to JP Morgan. JBG Cos. developed the property under a partnership with Grosvenor Americas. Construction started in 2011.

The District has 125 studio, one- and two-bedroom units. It is LEED Silver certified and features such amenities as garage parking, wi-fi, bike storage, a private on-site fitness center, a sundeck and more. Shalom Baranes Associates was the architect for the project. The Bozzuto Group is leasing the property.

Federal Capital Partners and Angelo, Gordon & Co. sold the Woodvale Apartments to the Laramar Group L.L.C. and Lubert-Adler Partners L.P. The transaction was brokered by Jones Lang LaSalle Inc. managing directors Al Cissel and Scott Melnick.

The 376-unit garden-style apartment community is located at 13831 Castle Blvd., near Columbia Pike and Briggs Chaney Road. The complex was constructed in 1981 and was most recently renovated in 2006. Its amenities include a swimming pool, business center and fitness center.

The list of recent important multifamily transactions in the greater Washington, D.C., area also includes Rockville’s 564-unit Avalon Decoverly and Arlington’s 828-unit Crystal House. AvalonBay Communities Inc. sold both properties for a total of $332 million. Last week, Keith Loria reported on Multihousingnews.com on the record-setting sale of the Archstone Crystal Towers in Arlington. At $322.25 million, the 912-unit apartment community went for the largest sum ever paid for a single multifamily property in the region. In addition, the JBG Cos. acquired the 450-unit Falkland Chase apartments in Silver Spring for $98 million, while Waterton Associates sold its Aston Woods apartment community to Azure Partners for $40.8 million.

Rendering courtesy of The District

450-Unit Silver Spring Apartment Community Sells to JBG

By Adrian Maties, Associate Editor

The JBG Cos., a Chevy Chase-based private real estate firm that develops, owns and manages office, residential, hotel and retail properties, has acquired the Falkland Chase apartments, a prominent apartment community in downtown Silver Spring. Home Properties of Rochester was the seller.

Falkland Chase is a 450-unit apartment community located at 8305 16th St., in the heart of one of Montgomery County’s busiest downtowns. It is close to the Silver Spring Metro station and a stop on the future Purple Line, as well as The Fillmore Music Hall, AFI Theater, Discovery Communications and an array of dining and shopping options. Amenities include fully equipped kitchens, fitness center, ceramic tiles in baths, hardwood floors and more. The community is also pet friendly.

“Falkland Chase is a great addition to our residential portfolio,” said David Paul, a JBG partner, in a statement to the press. “This is a well-located, transit-oriented community that we are proud to own. We are committed to providing excellent customer service to the residents at Falkland Chase from day one.”

Home Properties retained Jones Lang LaSalle Inc. to market the property. The price of the transaction has not yet been disclosed.

JBG has more than $10 billion in assets under management and development in the Washington, D.C., area. The company invests almost exclusively in urban-infill, transit-oriented developments. Its portfolio includes nearly 7,000 apartments among its 30 million square feet of office, residential, hotel and retail space. The Veridian apartments and the Silverton condominiums are JBG’s most recent developments in Silver Spring.

The Silver Spring apartment market has seen some action this past week. On March 28, Waterton Associates sold its Aston Woods apartment community to Azure Partners for $40.8 million. Aston Woods is a 261-unit community that was built in 1986. The asset is 94 percent leased and has seen almost $3 million in capital improvements during the past five years.

Photo credits: www.falklandchase.homeproperties.com

Charts courtesy of Marcus & Millichap.

Akridge, Mitsui Fudosan America Celebrate Groundbreaking of 168,000 SF D.C. Office Building

By Adrian Maties, Associate Editor

Full-service real estate firm Akridge and Mitsui Fudosan America, the U.S. subsidiary of Mitsui Fudosan Co., Japan’s largest publicly traded real estate company, celebrated the groundbreaking of a new trophy-class office project at 1200 17th St. on March 26. Mitsui Fudosan America CEO Yukio Yoshida,  Pillsbury Winthrop Shaw Pittman Managing Partner Christina Kearns, and Akridge Chairman Chip Akridge and Senior Vice President P. Brian Connolly spoke at the event.

1200 17th St. will total 168,000 square feet and will be located near the red, blue and orange Metro lines in Washington, D.C.’s central business district. It will feature contemporary finishes, with column-free client space, efficient floor plates, floor-to-ceiling glass and state-of-the-art amenities such as a full-service client-only fitness center, a green roof with entertainment space, bike storage and changing facilities, and ground-floor retail.

The boutique building is 63 percent pre-leased, with law firm Pillsbury Winthrop Shaw Pittman L.L.C. signing a 105,000-square-foot lease there in January. Four floors, totaling almost 60,000 square feet, remain available.

“This groundbreaking underscores the strength of the Washington real estate market and our city’s economy. The coming together of Mitsui Fudosan America, Pillsbury and Akridge demonstrates that true professionals, working together, will create the trophy-quality office building that Washington deserves,” said Connolly in a statement for the press.

1200 17th St. is targeting LEED Platinum certification. It was designed by Zimmer Gunsul Frasca Architects L.L.P. and will have Balfour Beatty as general contractor. The project is expected to be completed in the fourth quarter of 2014.

Mitsui Fudosan America joined Akridge on the project in August of last year, when it acquired First Potomac Realty Trust’s 95 percent stake in the property for $43.7 million. And it wasn’t the first project the two companies had partnered on. They also joined forces on 700 Sixth St., 1090 Vermont Ave. and The Homer Building at 601 13th St., N.W.

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Rendering courtesy of Mitsui Fudosan America.

Campus Apartments, Howard University to Develop $107M Student Housing Project

By Adrian Maties, Associate Editor

Campus Apartments L.L.C., the oldest and one of the largest privately held student housing companies in the nation, announced on March 19 it will develop two new on-campus residential facilities for Howard University. The project has an estimated cost of $107 million and is expected to energize the southeast core of the campus.

The two residence halls are designed to accommodate 1,360 students and will be built close to existing campus facilities to bring underclassmen closer to the vibrant core of the Howard University campus. They will include two-person semi-suites for underclassmen, communal social and study lounges, game rooms, laundry facilities and independent apartment units for faculty, staff and guests.

“The residence halls are designed to foster a true live-learn environment for underclassmen and will attract new generations of students for years to come,” said Daniel Bernstein, executive vice president & chief investment officer at Campus Apartments, in a statement for the press. Plans also call for a 200-person multipurpose room, classrooms and academic advisory offices. The facilities will provide a new home for Howard University’s Office of Residence Life, as well.

Campus Apartments and Howard University are working on the $107 million development together with Provident Resources Group, RBC Capital, Clark Construction and McKissack & McKissack. The project was financed through tax-exempt bonds issued by the District of Columbia and is slated for completion by August 2014.

“The addition of these state-of-the-art residential facilities will help to revitalize the Fourth Street corridor of our campus and establish a physical community for students to live, learn and socialize,” said Sidney Ribeau, president of Howard University. “By improving the quality of our housing, this project will aid in the recruitment and retention of students and enhance the overall collegiate experience at Howard University.”

Photo credits: McKissack & McKissack via Campus Apartments

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Monday Properties, Goldman Obtain $200M Construction Loan for 1812 N. Moore St.

By Adrian Maties, Associate Editor

Monday Properties and Goldman Sachs’ Real Estate Principal Investment Area have closed a $200 million construction loan with Pacific Life Insurance Co. for 1812 N. Moore St. The 390-foot building will be the tallest and greenest office tower in the Washington, D.C., region.

Monday Properties started work on the $300 million project in October 2010, using its own cash. Goldman Sachs joined the effort after buying a 78.5 percent stake in Monday’s 3 million-square-foot Rosslyn portfolio from Lehman Brothers.

1812 N. Moore St. is a 35-story, 580,000-square-foot trophy tower, one of the few privately developed LEED Platinum-registered office buildings in the United States and the first in the commonwealth of Virginia. It is located in Arlington’s Rosslyn neighborhood, within two blocks of major restaurants, hotels, banks and shops. Amenities include a two-story through-block main lobby with double-height ceilings, as well as on-site access to the Rosslyn Metro Station and a 480-space, fully enclosed, above- and below-grade parking garage.

As reported last year on this page, Monday Properties has selected CBRE to serve as the exclusive co-brokerage leasing agent for the property. No tenant signings have yet been announced, but CBRE reports that the Washington, D.C., metro area ended 2012 with an office vacancy rate of 10.6 percent and an overall asking rent of $52.08 on a full-service basis.

To date, 33 of the 35 stories have been built. A topping-out ceremony was scheduled for March 15, 2013. Project completion is expected in the fourth quarter of this year.

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Photo credits: www.1812northmoore.com.

Charts courtesy of CBRE.

Insight Prepares to Add TODs Valued at $153M to DC Area

By Adrian Maties, Associate Editor

Insight Property Group recently started work on two major transit-oriented apartment projects in the Washington, D.C., area. The Arlington, Va.-based multifamily developer is also nearing completion on a third project. The total cost of these three projects is $153 million.

Fenwick Station (reported on this page last month) is a 310-unit luxury apartment development located on the former Post Office site in Silver Spring, Md. The project has cost about $74 million construct; initial delivery of the residential units is planned for June 2014, with completion anticipated in December 2014.

Insight started construction on the Huntington Metro Apartments last week. Located in the Alexandria section of Fairfax County, Va., the project will deliver 240 apartments, at a total cost of $53 million. Initial delivery is scheduled for April 2014, with project completion planned for July 2014.

John Moriarty and Associates is the general contractor for both Fenwick Station and Huntington Metro Apartments. On Monday, March 4th, Cassidy Turley announced that Insight Property Group had closed on construction equity and debt financing totaling $129 million for the two apartment projects.

In the next couple of weeks, Insight Property also expects to finalize the construction of its Grayson Flats multifamily building in Arlington. The project has cost $26 million and will bring 67 ultra-luxury residential units to the desirable Rosslyn-Ballston Corridor of Arlington County. Amenities include a fitness center; resident lounge with kitchen, bar and billiards; outdoor terraces with gathering areas and fireplace; rooftop terraces; as well as structured parking. Clark Builders Group is the project’s general contractor.

“The two construction starts and the wrap-up of Grayson Flats represent three years of work,” said Insight Principal Michael Blum in a statement. “We have known and done business with the contractors, lenders and investors on these projects for years, and we are thrilled to be working together on such high-profile assets.”

Rendering of Huntington Metro Apartments courtesy of Insight Property Group.

Charts courtesy of Marcus&Millichap.

Renaissance Washington Completes $30M Hotel Renovation Project

By Adrian Maties, Associate Editor

Sunstone Hotel Investors Inc. has completed a $30 million renovation of The Renaissance Washington, DC Downtown Hotel.

The property, located at 999 Ninth Street at K Street, N.W., is close to Mt. Vernon Square, the Walter E. Washington Convention Center and numerous dining, entertainment and shopping options. The Penn Quarter neighborhood, Verizon Center, the Gallery Place Metro Station and Metro Center Metro Station are all within walking distance.

The Renaissance Washington, part of the Renaissance Hotels lifestyle brand of Marriott International, includes 807 guest rooms and suites. It also features 64,000 square feet of flexible function space and 30 breakout rooms, a 6,000-square-foot Vida Fitness center and a 4,000-square-foot Aura spa.

Dash Design of New York redesigned the guestrooms and guest corridor interiors. Guests will find a soothing neutral-color palate of khaki and coco-browns, with splashes of reinterpreted denim blues and reds. Upgrades include clean and modern furniture in each room, leather lounge and desk chairs inspired by 20th  century modernism, LED reading pin lights and luxurious spa-like bathrooms. Rooms also feature six-foot work surfaces, upgraded wireless Internet, 18-inch laptop safes, built-in mini-refrigerators, I-pod docking stations, Aveda spa products and 40-inch HDTVs.

“We are thrilled with our fresh new room product. When our guests discover our new rooms, they will appreciate the essence of modern lifestyle elegance without sacrificing warmth and functionality,” said Sharon Lockwood, the hotel’s general manager, in a statement for the press. “The new guestrooms and our recent lobby re-concept are part of the hotel’s evolution into more of a lifestyle space, beyond being termed a convention hotel.”

Renaissance Hotels represents a diverse collection of more than 151 hotels in 35 countries around the world. It was acquired in 1997 by Marriott International Inc. and is now one of the most popular brands in the Bethesda-based company’s portfolio.

Photo credits: Marriott International Inc.

Washington REIT Hires Cassidy Turley to Sell Region’s Largest Institutional-Quality Medical Office Portfolio

By Adrian Maties, Associate Editor

The Washington Real Estate Investment Trust (WRIT) recently selected Cassidy Turley to sell its 1.3 million-square-foot medical office portfolio in the Washington, D.C., region. The Cassidy Turley team that will market the portfolio includes Paul Collins, Bill Collins, Jud Ryan, Drew Flood and James Cassidy. J.P. Morgan will be co-agent.

WRIT is a leading owner and operator of diversified properties in the Washington, D.C., region. It recently reported fourth quarter and year-end financial and operating results for 2012 and announced a simplification of its diversified strategy to focus on office, multifamily and retail assets. To accelerate this strategy, the real estate investment trust decided to sell its medical office division.

The division consists of 17 institutional-quality medical office properties. It is the largest portfolio of its kind in the Washington, D.C., metro region and has very low leverage, with only three properties encumbered by mortgages totaling $24 million. The assets are all located in affluent communities or urban centers, near major medical centers such as INOVA Fairfax, Shady Grove Adventist and George Washington Hospital.

“Over the past 15 years, WRIT has assembled an exceptional medical office portfolio that accounts for 20 percent of the institutional-grade medical office assets in the D.C. metro area,” said Paul Collins, vice chairman with Cassidy Turley. “We expect the high quality of this portfolio and current marketplace demand for this product type to generate significant buyer interest.”

WRIT expects to gain embedded value through the potential sale of the portfolio. It should provide a lower cost of capital to continue to improve the quality, age and location of the company’s properties in its core office, multifamily and retail sectors.

Cassidy Turley, which named John Benziger as regional managing principal in the D.C. metro region at the end of January, has worked with WRIT before. In 2011, it sold the company’s 3.1 million-square-foot, 56-building industrial portfolio for $350 million.

Rock Creek Property Group Buys Properties Gospel Rescue Ministries-Owned Buildings, Plans Redevelopment

By Adrian Maties, Associate Editor

Rock Creek Property Group, a commercial real estate investment company founded in 2002, on Feb. 12 announced the acquisition of two adjacent buildings in the heart of Washington, D.C.’s Gallery Place/Chinatown neighborhood.

Constructed in 1932 on a 0.22-acre parcel, 808 and 810 Fifth St., N.W., total approximately 31,000 square feet. They are located within blocks of the Verizon Center and the Walter E. Washington Convention Center, and close to the Gallery Place/Chinatown Metro transit station.

The properties were purchased from Gospel Rescue Ministries of Washington, D.C. Rock Creek acquired the buildings through its Rock Creek Fund I Investors L.L.C. for just under $6 million, or $192 per square foot. The deal closed on Jan. 28. It was the fund’s sixth investment.

CBRE Group Inc. arranged the sale. Marc Rampulla, a first vice president of CBRE, represented the seller in the transaction. “The marketing process generated more than 10 written offers from local and national investors and concluded with a live auction for the finalists. Such dynamic interest demonstrates the aggressive attention that Washington, D.C., continues to attract from across the country. The East End demographics, amenity base and infrastructure continue to support redevelopment and long-term growth,” he said in a statement.

Rock Creek Property Group wants to convert 808 and 810 Fifth St., N.W., into a first-class, 50-unit residential development. The plans also include preserving the historical significance of the buildings and their surroundings. Rock Creek is also considering several other uses for the properties, such as university housing, corporate housing for the growing surrounding base of national law firms, and clinical/office use for faith-based and other non-profit organizations.

Photo credits: Rock Creek Property Group

Developers Break Ground on 310-Unit Apartment Project in Silver Spring

By Adrian Maties, Associate Editor

Insight Property Group L.L.C. of Arlington, Va., and Chevy Chase-based Nova-Habitat L.L.C. held a ceremony on Feb. 5 to celebrate the groundbreaking of Fenwick Station, a six-story, 310-unit apartment development in downtown Silver Spring. Neighborhood leaders and Montgomery County officials were also present at the event.

The new development is located two blocks from the Silver Spring Metro Station,  on the site of the former U.S. Post Office distribution facility at 8616 Second Ave. Fenwick Station will deliver a mix of studio, one- and two-bedroom apartments. Thirty-nine apartments will be affordable units.

Fenwick Station will include 11,000 square feet of amenity space, with a public plaza, a Capital Bikeshare station and a temporary walking and biking trail that will be connected to the future Capital Crescent Trail. It will offer residents a variety of recreational and social spaces, such as an outdoor dining room and pool, resident lounge and clubroom with kitchen and billiards, fully wired business center, fitness center, guest suite and rooftop terrace with an open-air TV gathering space and built-in bar.

The project is designed to achieve LEED Silver certification. A team of top-quality design and construction firms is working on it, including SK&I (lead architect), Hord Coplan Macht Inc. (landscape architect), PNC Bank (construction lender), John Moriarty & Associates (general contractor), Eagle Bank (acquisition lender), Loiederman Soltesz Associates Inc. (civil engineer) and SR/A (interior designer).

Montgomery County Department of Economic Development Director Steve Silverman thinks “Fenwick Station will improve the important connection between nearby neighborhoods and the downtown Metro core.”

Insight Principal Richard Hausler said, “Fenwick Station is located in a well-established residential neighborhood and at the same time offers residents immediate access to the Metro and all of the amenities of downtown Silver Spring. The large plaza area will also welcome residents from surrounding neighborhoods, with attractive benches, a water fountain for bikers and a gathering place for community events.” He added, “Silver Spring continues to experience very low apartment vacancy rates, with strong demand for apartments that are walking distance to the Metro, retail, restaurants and a large commercial jobs base. We received wonderful support from the surrounding communities and the county agencies as we went through the planning for this important addition to the Silver Spring community.”

Photo credits: Insight Property Group

Charts courtesy of Marcus&Millichap

901 New York Avenue Awarded LEED Gold Certification

By Adrian Maties, Associate Editor

The 901 New York Avenue office building, a skyscraper located at 901 New York Ave., N.W., in Washington, D.C., has earned LEED-EB Gold certification. The property is co-owned by Boston Properties and an institutional client advised by J.P. Morgan Asset Management.

Boston Properties developed the 11-story Class A office building in an effort to help revitalize the Mount Vernon Square neighborhood. It was completed in 2005, at a cost of $54 million. The 530,000-square-foot office building features four levels of below-grade parking, as well as 25,000 square feet of retail space on the ground floor. It was designed by Davis Carter Scott of McLean, Va. N.W. Clark Construction Group L.L.C. served as general contractor.

The U.S. Green Building Council awards LEED-EB Gold certification to buildings with a maximized operational efficiency and minimal environmental impacts. In order to achieve Gold certification, 901 New York Avenue implemented many sustainability actions, such as recycling more than 50 percent of the daily ongoing waste stream; achieving an ENERGY STAR label; introducing water-efficient plumbing fixtures; diverting 100 percent of the electronic equipment solid waste from the landfill as part of a comprehensive recycling program; reducing CO₂ emissions; and more. Leonardo Academy, a charitable 501(c)(3) nonprofit organization dedicated to advancing sustainability, was the LEED consultant supporting the successful achievement of the Gold certification.

Jeff Garner, director of engineering for Boston Properties’ Washington, D.C., region, said, “We are very proud to achieve LEED-EB O&M Gold certification for 901 New York Avenue. This initial certification was an especially rewarding process for the entire 901 New York Avenue property management team that ultimately made this effort a reality. Although we enjoyed a good start from our favorable sustainable site base and existing efficiency/conservation programs, actually obtaining certification required a tremendous amount of research, investigation, implementation, improvements and documentation, not to mention the commitment and support from our tenants. We are extremely pleased of what was accomplished and look forward to the continued privilege of operating the building as a LEED Gold facility.”

Photo credit: Boston Properties

Mill Creek Starts Construction on 360-Unit Alexandria Apartment Community

By Adrian Maties, Associate Editor

Mill Creek Residential Trust L.L.C. has started construction on a 360-unit apartment community in Alexandria, Va. It is developing the project as part of a joint venture with AEW Capital Management and the original land owners, represented by Green City Development.

The transit-friendly, mixed-use multifamily community is called Landmark Gateway. It is located in Alexandria’s West End, with excellent access to I-395 and I-495 and the greater Washington, D.C., metropolitan area. Cameron Station, an established master-planned community of more than 2,000 single-family homes and condominiums, is adjacent to the site; the Van Dorn Metrorail station and Landmark Mall Shopping Center, Alexandria’s largest shopping center, are less than half a mile away. Green City rezoned the site from industrial to residential mixed-use on behalf of Gateway Holding I, a venture between Green City and O’Connor Capital Partners.

Landmark Gateway will offer its tenants studio, one- and two-bedroom units, including junior one-bedroom floor plan and den options and ranging in size from 509 square feet to 1,132 square feet. Apartment features include 42-inch maple cabinets, stainless steel appliances, tiled backsplashes and baths, in-unit washers and dryers, Schlage keyless entry systems and moveable kitchen islands.

The developers will also add 15,000 square feet of retail space. Other community amenities include a state-of-the-art fitness studio, cyber cafe, demonstration kitchen, game room and television lounge. The first units are scheduled to be delivered in the summer of 2014.

“There continues to be a growing demand for quality rental housing in the greater D.C. area,” said Sean Caldwell, managing director with oversight for the development of Mill Creek. “Landmark Gateway’s ‘inside the Beltway’ location provides unparalleled access to key employers, shopping and entertainment districts, as well as an incredible amenities package designed to appeal to today’s renter.”

Mill Creek currently has 1,591 units in active leasing or under development in the greater Washington, D.C., market. Furthermore, it is not the only company trying to bring luxury apartments to the area. Toll Brothers Inc., the nation’s leading builder of luxury homes, has also recently purchased a development site in downtown Bethesda and plans to break ground this fall on a seven-story building with approximately 60 luxury condominium residences and underground parking.

Photo credits: Mill Creek

Charts courtesy of Marcus & Millichap.

COPT Announces Two New Virginia Data Centers

By Adrian Maties, Associate Editor

Corporate Office Properties Trust (NYSE: OFC), a Columbia, Md.-based office real estate investment trust, announced on Jan. 14 that it plans to develop two shell buildings in Ashburn, Va. (Ashburn Crossing). The company’s total investment in Ashburn Crossing is projected to be $42 million. It includes the remaining land, on which the company can build one additional building.

This is the latest addition to Loudon County’s growing data center market. The project will include two buildings with a total of 315,000 square feet. Construction on COPT DC-8, the first building, will start in early 2013. COPT DC-8 will total 200,000 square feet. The second building, COPT DC-9, will total 115,000 square feet. COPT plans to start work on it no later than mid-2014.

The two buildings will be developed on land the company purchased on Dec. 27, 2012, from St. John’s Properties. According to Loudoun County land records, COPT DC-8 L.L.C., an affiliate of the Columbia-based real estate investment trust, paid $14 million for the 34-acre site, more than $400,000 per acre. The acreage is located off Smith Switch Road, near the intersection of Gloucester Parkway and Loudoun County Parkway, in the center of data center activity in Northern Virginia.

COPT announced it executed leases with a subsidiary of an investment-grade Fortune 500 company but did not disclose its name. According to the Washington Business Journal, Amazon is the anchor tenant. The REIT signed the leases at the end of 2012. They brought COPT’s development leasing volume to 1.2 million square feet for the year.

“We are pleased to be able to meet this customer’s need in Northern Virginia, one of COPT’s strategic markets,” Roger A. Waesche, Jr., President & Chief Executive Officer of COPT, said in a news release. “These leases further evidence COPT’s discipline in matching new development starts to projects where demand is strong and/or where we have leases in-hand,” he added.

Rendering of COPT DC-6 courtesy of www.coptdata.com

Transwestern Team Sells Three Maryland Apartment Communities for Almost $100M

By Adrian Maties, Associate Editor

Transwestern’s Bethesda, Md.-based Mid-Atlantic Multifamily Group finished 2012 strong. In December, the group headed by co-directors Dean Sigmon and Robin Williams closed three deals in Maryland totaling almost $100 million.

Transwestern represented the sellers in all three transactions. Two of them are located in the Washington, D.C., metro area, in Wheaton and Rockville, while the third is in Owings Mills.

Glenmont Crossing is a 199-unit garden apartment and townhome style community in Wheaton, Montgomery County. A partnership between Buvermo Investments and Abbey Road Development sold it to the Housing Opportunities Commission of Montgomery County through the right of first refusal process. The price of the transaction was $27.9 million, or $140,201 per unit.

Rockville’s Fireside Park is a 236-unit garden-style community. Hampshire Properties also sold it through a right of first refusal to Rockville Housing Enterprises. The company received $36 million for the community, or $152,542 per unit.

Home Properties sold the 284-unit Timbercroft Townhomes community in Owings Mills, Baltimore County, to The Wishcamper Cos. and RMDG Inc. for $29.2 million, or $102,641 per unit.

“We are looking forward to the coming year and expect a continuation of the robust apartment market in the Washington metro area, with a continued interest in core and core-plus communities,” Dean Sigmon said in a news release.

The Washington metro area saw an increase of activity through the fourth quarter. Most recently, the Rockville-based Donaldson Group and its equity partner, Angelo, Gordon & Co. of New York, acquired Rolling Brook Village, a 732-unit garden apartment community located in Woodbridge, Va., for approximately $107.5 million. To find out more about this story, click here and read an article by MHN’s Jessica Fiur.

Click here for more market data on Washington, D.C.

Charts courtesy of Marcus&Millichap.

PRI Profits from 1718 Connecticut Ave. Sale; Social & Scientific Systems Renews

By Adrian Maties, Associate Editor

An entity operated by Dave Schaeffer, CEO of the Cogent Communications Group Inc., has paid $14.4 million for a landmark office building located at 1718 Connecticut Ave., N.W., in Washington, D.C. Richard McBride and Roy Ayers of Washington’s  McBride Real Estate Services Inc. represented both the buyer and the seller, PRI Inc.

The building was constructed in 1982. It has 47,569 gross square feet and is fully leased to such office tenants as law firm Katz, Marshall & Banks; Policy Study Associates; Electronic Privacy; and Martell & Associates. The building’s street-level retail space is occupied by a Bethesda Bagels restaurant and A Brighter Image.

PRI Inc., headed by local investor Nicholas Papadopoulos, acquired the building for $5.5 million. It sold it as part of a planned 1031 exchange for a fully leased warehouse in Hagerstown, Md.

McBride said in a news release that PRI “wanted to maximize the sale price and have the purchaser assume approximately $4.5 million of existing debt. To meet these objectives, the McBride team marketed the property to pre-qualified investors active in the Washington, D.C., metropolitan area while simultaneously searching for prospective exchange properties.” Schaeffer’s group agreed to take on the existing debt on the property.

In other real estate-related news, Social & Scientific Systems Inc. has renewed its long-term lease at Washington Property Co.’s Silver Spring Plaza. The public health research company will occupy 88,230 square feet for its corporate headquarters.

The multi-tenant building is located at 8757 Georgia Ave. in Silver Spring, Md. It totals 14 stories and 242,000 square feet of space. Jones Lang LaSalle Inc.’s Jim Cahill, Joe Judge and Bob Shue represented the tenant, while the owner was represented by Marc Witowski of WPC.

“We made our final decision in part for economic reasons but also by listening to the compelling comments of our staff regarding proximity to the Metro, restaurants and other services and commuting distances,” Jim Lynch, president & CEO of Social & Scientific Systems, said in a news release. “After working here for more than 11 years, our employees are part of this community, and this was a perspective that was very important to us.”

Photo credits: McBride Real Estate Services

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CBRE Arranges $212M in Financing for Virginia Office Complex

By Adrian Maties, Associate Editor

CBRE Capital Markets announced it arranged $212 million in financing for Metro Park, a trophy-class office portfolio in Alexandria, Va. CBRE worked exclusively on behalf of Clarion Partners, a leading U.S. real estate investment manager based in New York.

SunTrust Bank and HSBC Credit Corp. have provided the funding for the seven-year loan. It has a fixed rate of roughly 3 percent and a 50 percent loan-to-value ratio.

Metro Park is a 37-acre office park, strategically located at the crossroads of Northern Virginia’s major roadways and extensive public transportation network. It comprises 1.2 million rentable square feet within seven office buildings. Clarion Partners acquired it in 2006 for $214 million.

The office park offers its tenants numerous first-rate amenities, such as a centrally located fitness center, a state-of-the-art LEED Platinum Conference Center with catering facilities, plenty of parking spaces, on-site daycare, dining facilities and shuttle service, all in a park-like setting.

Metro Park is located near Fort Belvoir and the National Geospatial Intelligence Agency (NGA) headquarters, in an area that has seen growth as a result of the Base Realignment and Closure (BRAC) initiative. It is now home to the General Services Administration and some of the largest government contractors in the nation.

CBRE executive vice president Joe Donato led the team that arranged the financing. “Despite the headlines about the fiscal cliff and sequestration, we received interest from both banks and life companies. Clarion Partners has done a tremendous job creating the premier office park in Northern Virginia, and the quality of this portfolio combined with a low leverage request from a top-tier borrower resulted in favorable financing terms,” he said in a press release.

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Photo credits: http://www.metroparkva.com/

Charts courtesy of Marcus&Millichap.

Loews Acquires The Madison Hotel in Washington, D.C.

By Adrian Maties, Associate Editor

Loews Hotels & Resorts, a wholly owned subsidiary of Loews Corp. (NYSE: L), is entering the Washington market. The New York-based hotel owner and operator has agreed to purchase the Madison Hotel from Jamestown Properties, an Atlanta-based real estate investment firm. The price has not been disclosed, but the acquisition is expected to close in January 2013.

This is Loews’ second major hotel acquisition this year, as it purchased the Renaissance Hotel & Spa in Hollywood, Calif., in June. The two buys are part of the company’s plan to strengthen its portfolio over the next five years; it expects to announce additional new properties in the coming months. It now owns and operates 18 hotels and resorts in the United States and Canada, and aims to boost the count to more than 30.

The Madison Hotel is located at 1177 15th St., N.W., in the heart of Washington, D.C. It has 356 rooms and more than 12,000 square feet of state-of-the-art meeting and event space in 12 distinct settings, including a 3,300-square-foot ballroom with seating capacity for as many as 400 people. The Madison is also home to the Federalist, one of the District’s top restaurants, and the PostScript Bar and Lounge.

Loews managed the hotel until January 2011, when Jamestown Properties purchased it and an adjacent office building for $123 million. The property just underwent a $23 million renovation.

Washington, D.C., ranks among the top seven U.S. cities for international travelers and among the top 20 domestically. It attracted an estimated 18 million visitors in 2012. The Madison is in a prime location, close to the White House, Embassy Row, the Capitol Building, the National Mall and Smithsonian museums. “We expect that the hotel’s quality coupled with the addition of the Loews brand will give us a strong, competitive position in the D.C. market,” said Paul Whetsell, Loews’ president & CEO, who joined almost a year ago to lead the company’s growth strategy.

Photo credits: www.facebook.com/MadisonDC

Charts courtesy of Marcus&Millichap.

Laurel Apartment Complex Sells for $28M

By Adrian Maties, Associate Editor

The Westgate of Laurel, a renovated apartment complex in the heart of the Baltimore-Washington corridor, was recently sold to  Westgate DNB Associates, a subsidiary of Geller Associates Inc. of Roseland, N.J. The CBRE Washington, D.C., Multi-Housing Investment Team arranged the sale.

The Westgate of Laurel is a 201,704-square-foot apartment complex built in 1964 in Laurel, Md. The seller updated all 218 units with high-end elements, from windows to kitchen finishes, commanding a rental premium over many other local apartments.

Tenants can choose from one-bedroom apartments with a den, two- and three-bedroom units with walk-in-closets, plush wall-to-wall carpeting, side-by-side washers and dryers, and air conditioning. Community amenities include a swimming pool, chlidren’s playground, on-site daycare and free parking. Westgate of Laurel is located close to schools, shopping and public transportation, with Fort Meade, Andrews AFB, Walter Reed and the National Security Agency less than half a mile away.

Westgate DNB Associates paid $27.9 million, or $128,178 per apartment, to Westgate Apartments Investors L.L.C. for the complex. Mike Muldowney led the CBRE team of Bill Roohan, Andy Boyer, Michael Rudolph, Brian Margerum and Martha Hastings that represented the seller. At closing, Westgate of Laurel was approximately 93 percent occupied.

“The Baltimore-Washington corridor and the region around Fort Meade, the National Security Agency, Defense Information Systems Agency and U.S. Cyber Command have become a magnet for high-tech jobs. The resulting stability of the workforce continues to pump value and interest into the neighboring real estate market, as exemplified by the acquisition of this attractive asset,” said Michael Muldowney, executive vice president.

Marcus & Millichap reports that strong property performance supported an increase in transaction velocity of 20 percent from one year ago. Deal flow surged more than 30 percent in the district, and more modest increases were recorded in Maryland and Virginia. The median price of properties sold in the Washington, D.C., Metro Area rose 11 percent in the past year to $101,200 per unit. Each section of the metro area saw a rise in median price, led by a 14 percent gain in Maryland to $78,500 per unit.

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Charts courtesy of Marcus & Millichap.

Photo credits: The Westgate of Laurel

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