This Week's D.C. Deal Sheet

Mayor Muriel Bowser and other city officials were on hand Thursday to celebrate the groundbreaking for the new hospital at the St. Elizabeths East campus, the first new inpatient facility to open in the city in two decades. The $375M project will host 136 beds.

The hospital will be named Cedar Hill Regional Medical Center, GW Health, in reference to the nearby estate of abolitionist Frederick Douglass. 

The 365K SF medical center operated by Universal Health Services will host physicians and graduate students from George Washington University and Children’s National Hospital. The latter is especially important in light of the 2017 closure of the city-run United Medical Center’s obstetrics ward, which contributed to a dearth of maternal healthcare in Wards 7 and 8. 

Officials said UMC would remain open until the new St. Elizabeths East campus welcomes patients, scheduled to occur in December 2024. Turner Construction and MCN Build Joint Venture are building the project.

CAPITAL MARKETS DEALS

JBG Smith announced a $580M joint venture with Fortress Investment Group this week to recapitalize a seven-building portfolio in the D.C. region. Eastdil Secured was JBG Smith’s exclusive adviser in the transaction, which is expected to close by midyear. The deal is part of JBG’s strategy to concentrate its office holdings in the booming National Landing area, where the developer is preparing for the arrival of Amazon’s HQ2.

The buildings in this week’s deal are 7200 Wisconsin Ave. in Bethesda, 1730 M St. NW in D.C., RTC West I, II and III in Reston, and Courthouse Plaza I and II in Arlington, according to a press release.

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A string of new deals reported this week reveal just how active Amazon remains in the Northern Virginia market. The web giant’s data services arm sold two Manassas parcels for $87.4M at the end of last year, both to Stack Innovation Holdings. Then it bought two Aldie, Virginia, data centers plus a neighboring undeveloped parcel from Quail Ridge NCP LLC for roughly $146M the next day, the Washington Business Journal reported.

And last month, Amazon reportedly purchased three Sterling office buildings for $26.4M from Baltimore-based St. John Properties, according to WBJ. Together, the three buildings total more than 128K SF. This follows a report just a few weeks ago of Amazon purchasing a different trio of Sterling office buildings for $21M, netting 252K SF of office space. Amazon, as usual, has been mum about its future plans.

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Alexandria City Public Schools is proceeding with plans to create another office-to-school conversion for the city. The school system announced it purchased an office building at 1703 North Beauregard St. late Friday. The total value of the property was assessed at $13.4M in January, according to property records. The cost to purchase and redevelop is well below the budgeted cost to construct an entirely new school in the rapidly densifying city, Alexandria Living magazine first reported.

ACPS is exploring using the building as part of a broader campus. It neighbors Ferdinand T. Day Elementary School at 1701 North Beauregard St., which is also an office-to-school conversion. The district plans to use the four-story office building as a “flex space” for now while two other schools undergo renovations. Eventually, the building will become a 600-student elementary or secondary school.

Meany & Oliver's Sharon Oliver, Phil Meany and Martin Griffin represented ACPS in the deal. Cushman & Wakefield's Eric Berlin and Jessica Miller represented the seller.

LEASES

Healthcare provider AccentCare has agreed to take up nearly 4K SF on the second floor of Benning Market, a newly delivered development by Neighborhood Development Corp. The retail/office development in Ward 7 sits across from a future D.C. Streetcar stop at 3451 Benning Road NE. Divaris Real Estate’s Rob Gray and Joe Farina represented the landlord in the lease. This is AccentCare’s first D.C. lease. Slightly more than 2K SF of office/retail space remains in the building, which is roughly 13K SF in total.

CONSTRUCTION MILESTONES

Bernstein Management Corp. completed its transformation of the former “White House Garage” into a 58K SF office building at 1222 22nd St. The building is already 75% leased, thanks to tenants Perkins & Will, Premise and Knoll Inc. Roughly 14K SF remain on the building’s third floor. Cushman & Wakefield is handling construction management and leasing.

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The AC Hotel Washington DC Capitol Hill Navy Yard is now open. The hotel features 225 guest rooms on 11 floors and a rooftop bar and restaurant called Smoke & Mirrors. Other amenities include more than 3K SF of meeting space and a 24-hour, 10K SF fitness center. AC Hotel, a Marriott brand, operates two other hotels in D.C. at the convention center and downtown, according to its website.

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The Wharf is celebrating the opening of the Boardwalk Bar & Arcade this weekend. The bar, operated by Takoda and Boardwalk Penn Quarter owners Better Hospitality Group, occupies the site of a former yoga studio and nautical retail store at 715 Wharf St. SW, the Washington Business Journal first reported. The space will fit 640 people across 10K SF, and it features reloadable arcade cards and daily happy hours.

PERSONNEL

International construction consultancy Cumming announced that Steven Griffiths, a veteran of its London office, will lead its growing Washington, D.C., office. Cumming anticipates Griffiths will spur "double-digit growth" in the area over the next year, overseeing "all project phases from construction concept to final fit-out," per a press release.