District of Columbia

WHC, Amazon, JBG SMITH Acquire Apartment Community in D.C. for $71.5M

by John Nelson January 3, 2023

WASHINGTON, D.C. — Nonprofit organization Washington Housing Conservancy (WHC) has acquired Loree Grand, a 212-unit apartment community in Washington, D.C. In partnership with Amazon’s Housing Equity Fund and the Impact Pool, an investment vehicle managed by local developer JBG SMITH, WHC purchased the 10-story community for $71.5 million. JBG SMITH will manage the 195,000-square-foot property on behalf of WHC, which will preserve affordability for moderate- and low-income families and individuals. Bordered by D.C.’s NoMA, Union Market and H Street neighborhoods, the community features units averaging 900 square feet in size. WHC will preserve Loree Grand’s existing 30 inclusionary zoning units for 99 years, create an additional 129 affordable units for residents earning 80 percent of AMI or less and set aside the remaining 53 units for residents earning 120 percent of AMI or less. Eagle Bank provided acquisition financing for the transaction, Amazon Housing Equity Fund provided subordinate financing and Impact Pool provided mezzanine financing. Arnold & Porter provided pro bono legal counsel to WHC.

January 3, 2023

District of Columbia Market Reports Restaurant Retail Southeast Southeast Market Reports

D.C. Retail Sector is a Tale of Two Markets: Downtown and Everywhere Else

by John Nelson January 2, 2023

So much has been made about the future of retail in the United States. Is it dead? Is it back? How has it evolved? No doubt, retail was the sector most affected by the COVID-19 pandemic, and that is also true here in Washington, D.C. If you look at regional data, it appears to be rebounding nicely. The overall market currently boasts a near record-low vacancy rate at just 5.1 percent, according to CoStar Group. Tighter market conditions have helped landlords restore pricing power throughout the District, and asking rents and rent growth have surpassed pre-pandemic highs. When we measure by net absorption, retail demand in the region in 2022 is on pace to reach its highest level since 2016. But numbers don’t tell the whole story as the retail sector’s recovery in D.C.’s downtown market post COVID differs greatly from all of the metropolitan area’s other submarkets in a scenario that can only be described as a tale of two markets. Downtown D.C. So, what’s driving downtown retail these days? Simply, it’s the office market. Retail’s post-pandemic recovery is almost entirely dependent on office workers, and there is no more significant factor at play for its success than corporation’s …

January 2, 2023

Acquisitions Affordable Housing District of Columbia Multifamily Southeast

Greysteel Brokers $76.7M Sale of Six-Property Multifamily Portfolio in Northwest D.C.

by John Nelson December 22, 2022

WASHINGTON, D.C. — Greysteel has brokered the sale of a six-property multifamily portfolio in Northwest Washington, D.C., totaling 362 apartments. The six properties in the portfolio include Barclay, Ravenel, Park Meridian, Park Marconi, Richman Towers and Sarbin Towers. Van Metre Cos. and institutional investors advised by J.P. Morgan Asset Management sold the portfolio to four different buyers for approximately $76.7 million, three of which were sold to local nonprofit affordable housing provider Jubilee Housing. Kyle Tangney and Herbert Schwat of Greysteel represented the sellers in the transaction. Four of the assets will be preserved as affordable housing. All six properties were sold via an assignment of their respective tenant associations to third-party developers pursuant to D.C.’s Tenant Opportunity to Purchase Act (TOPA).

December 22, 2022

District of Columbia Market Reports Office Southeast Southeast Market Reports

Something is Happening in Downtown D.C.’s Office Market

by John Nelson December 19, 2022

Downtown Washington, D.C., is confronting many of the same pandemic-generated challenges as other urban markets across the United States. This includes above-average and record high commercial vacancy (office and retail), as well as lower-than-average daytime foot traffic, in part due to an increase in hybrid work. Yet there is a case to be made that now is a unique moment for leasing office (and retail) space in the District’s central business district (CBD). The loss of foot traffic has hit downtown retail particularly hard, especially fast-casual dining. Coffee shops and sandwich places that depend on office workers have closed at a higher rate than other food-related retail. But the pedestrians are coming back. Kastle Systems’ data from the DowntownDC Business Improvement District (BID) shows an increase since Labor Day in the number of workers at their desks, with approximately 42 percent of the pre-pandemic number of employees in-office on a weekly basis, compared with around 33 percent last spring. This is expected to rise as more employers establish return-to-office policies. Despite 2022’s turbulent economy over the first six months, D.C.’s office leasing activity was up 16 percent compared with the first half of 2021, according to Cushman & Wakefield. The …

December 19, 2022

District of Columbia Hospitality Southeast

US Economy Adds 263,000 Jobs in November, While Hourly Wages Rise 0.6 Percent

by John Nelson December 5, 2022

WASHINGTON, D.C. — The U.S. economy added 263,000 jobs in November, and the unemployment rate remained unchanged at 3.7 percent, according to the U.S. Bureau of Labor Statistics (BLS). The employment gains beat Dow Jones economists’ expectations of 200,000 new jobs, reports CNBC. Meanwhile, average hourly wages jumped 0.6 percent for the month, according to the BLS, double the estimate of economists. Furthermore, the 5.1 percent annual growth in wages exceeded the expectation of 4.6 percent. CNBC also reports that the better-than-expected wage growth may put even greater pressure on the Federal Reserve to continue its path of rate hikes, which Fed officials have been signaling as likely ahead of the December Federal Open Markets Committee (FOMC) meeting. Many media outlets report that economists are expecting the central bank to boost the federal funds rate by 50 basis points before the end of the year, raising the target range to between 4.25 and 4.5 percent. However, some other media sources indicate that strong wage growth is another sign of inflation and could push the Fed to boost the rate by 75 basis points. Big gains in leisure and hospitality In November, the employment sector with the biggest surge was leisure and …

December 5, 2022

District of Columbia Leasing Activity Office Southeast

Oxford Signs Law Firm to 40,914 SF Lease Renewal, Expansion at 1101 New York Avenue in D.C.

by John Nelson December 1, 2022

WASHINGTON, D.C. — Oxford Properties Group has signed Allen & Overy LLP to a long-term lease renewal and expansion at 1101 New York Ave. in Washington, D.C. The law firm will continue to occupy the 11th floor and expand into a portion of the tower’s 10th floor. The tenant plans to begin renovations to its space in early 2023. Tom Fulcher, Julie Rayfield and Adam Brecher of Savills represented Allen & Overy in the lease negotiations. Matt Pacinelli, Kyle Luby and John Klinke of Stream Realty Partners represented Oxford Properties.

December 1, 2022

Acquisitions District of Columbia Retail Southeast

Northmarq Brokers $7.6M Sale of Retail Condominium in Downtown D.C. Leased to TD Bank

by John Nelson November 22, 2022

WASHINGTON, D.C. — Northmarq has brokered the sale of a 4,403-square-foot retail condo on the ground floor of the Metropole Condominiums located at 1515 15th St. NW in downtown Washington, D.C. Built in 2008 in the city’s Logan Circle neighborhood, the property was fully leased at the time of sale to TD Bank. Isaiah Harf of Northmarq represented the seller, a private investor based in Maryland, in the transaction. The California-based, 1031 exchange buyer acquired the asset for approximately $7.6 million.

November 22, 2022

District of Columbia Southeast

US Economy Adds 261,000 Jobs in October, Unemployment Rate Ticks Up to 3.7 Percent

by John Nelson November 4, 2022

WASHINGTON, D.C. — Total U.S. nonfarm payroll employment rose by 261,000 in October, and the unemployment rate ticked back up 20 basis points to 3.7 percent, according to the U.S. Bureau of Labor Statistics (BLS). Monthly job growth has averaged 407,000 year-to-date in 2022, compared with 562,000 per month in 2021. The October performance beat the Dow Jones estimate of 205,000 but the economists expected the unemployment rate to remain at 3.5 percent, according to CNBC. Healthcare led all employment sectors in adding October jobs with 53,000, which is slightly ahead of its average monthly gain thus far this year (47,000). Professional and businesses services added 43,000 jobs in October and manufacturing grew by 32,000. Leisure and hospitality added 35,000 jobs, which is far below the sector’s average monthly job gain over the first nine months of the year (78,000). Additionally, the BLS revised the employment gains for August down by 23,000, from 315,000 to 292,000. The September figure was revised upward by 52,000, from 263,000 to 315,000.

November 4, 2022

District of Columbia Features Southeast

Sun Belt Markets Dominate Top 10 ‘Markets to Watch’ in 2023, According to Emerging Trends Report

by John Nelson November 2, 2022

WASHINGTON, D.C. — A variety of Sun Belt markets once again lead the “top markets to watch” in 2023 for overall real estate prospects, with Nashville ranking No. 1 for the second consecutive year in the annual Emerging Trends report issued by the Urban Land Institute (ULI) and PwC US. Using proprietary data and insights from more than 2,000 real estate industry experts across 80 tracked markets in the United States and Canada, Emerging Trends pegged the Music City as a “supernova” market due to its evolution from an 18-hour city to a “24-hour metropolis.” In the past couple years, Nashville has attracted Amazon and Oracle to build new office campuses, and two weeks ago the NFL’s Tennessee Titans and the Metropolitan Government of Nashville and Davidson County agreed to terms for a new $2.1 billion football stadium in the East Bank district that could attract events such as the Super Bowl and College Football Playoff. The private investment is in response to the Nashville MSA posting a 21 percent population growth rate in the past decade, according to the latest U.S. Census data. The Emerging Trends report noted that the pandemic has reinforced these migration trends as workers from …

November 2, 2022

Affordable Housing Development District of Columbia Loans Multifamily Southeast

Redbrick Receives $142.5M Construction Loan for Residential Development in D.C.

by John Nelson October 31, 2022

WASHINGTON, D.C. — Redbrick LMD has received a $142.5 million construction loan for the development of The Douglass, a 750-unit residential project in Washington, D.C.’s Bridge District. Brian Gould of Chatham Financial arranged the loan through Citizens Bank on behalf of Redbrick. The Douglass will feature 40,000 square feet of retail space, and about 80 of the apartments will be reserved as affordable housing. The Douglass will be the first building constructed in the Bridge District, which comprises eight acres. Upon completion, the 2.5 million-square-foot project will be developed as a mixed-use neighborhood with a focus on sustainability and wellness. The Douglass is designed to target net zero carbon from operations and to meet or exceed International Future Living Institute (IFLI) and LEED Platinum standards.

October 31, 2022

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