This Week's D.C. Deal Sheet
AvalonBay Communities has sold an apartment building on Arlington's Columbia Pike corridor for $105M.
The national multifamily REIT, which is headquartered nearby in Ballston, revealed in its earnings release this week that it sold the 269-unit Avalon Columbia Pike building in July. It didn't disclose the buyer, but property records show it was acquired by an affiliate of D.C.-based Penzance.
The building has been rebranded to the Jasper Columbia Pike and is being managed by Greystar, according to the property's website. The property has 27K SF of retail space housing tenants like Lost Dog Café, a Virginia ABC liquor store, a beauty salon and a martial arts studio.
AvalonBay acquired the building in 2016 for $102M from DSF Group, which developed it in 2009.
The REIT said in its earnings release this was one of three sales it has closed since April, including buildings in Dale City, California, and Newton, Massachusetts. AvalonBay Chief Investment Officer Matthew Birenbaum said during its Tuesday earnings call the company was pleased with its ability to close the sales despite the headwinds in the capital markets, adding that it plans to reinvest some of the proceeds in acquisitions.
"While we were able to close on three asset sales in the past few months, transaction activity is still relatively muted with total sales volumes off roughly 70% from 2022 levels," he said. "In general, cap rates on the assets that are selling tend to be below prevailing debt rates, although there are also listings that are not proceeding to closing due to a bid-ask spread between seller and buyer."
LEASES
Marx Realty has landed a 21.5K SF lease with Locust Street Group at The Herald office building in Downtown D.C. The strategic communications and public relations firm committed to a 12-year lease for the full 10th floor and more than half of the ninth floor.
The New York-based developer acquired the building at 1307 New York Ave. NW in April 2020, then completed a $41.5M renovation, designed by Studios Architecture. Avision Young's Will Stern and Eli Barnes represented the landlord in the lease, while Savills' Ken Biberaj and Danielle Ferrari represented the tenant.
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Invariant, a government relations consulting firm, signed a 17K SF lease to relocate from 901 Seventh St. NW to 740 15th St. NW, Commercial Observer reported. The 15th Street building is owned by the National Community Reinvestment Coalition, which also occupies part of it. Stream Realty Partners' John Klinke, Matt Pacinelli and Josh McDonald represented the landlord, while The Tenant Agency's Melanie Matthews and Samuel Buckner represented the tenant.
FINANCING
The D.C. Housing Finance Agency announced Friday it closed two deals last week totaling more than $180M. One deal was for new construction: a 212-unit affordable building that is the second phase of the Northwest One project in NoMa. DCHFA issued $45M in tax-exempt bonds and underwrote $37.8M in Low-Income Housing Tax Credit equity for the project, led by MRP Realty, CSG Urban Partners and Taylor Adams Associates.
The other deal was for the acquisition and renovation of 461 units across two 1950s-era buildings in Ward 8’s Villages at Parklands Community. The two tenants associations of the buildings used their Tenant Opportunity to Purchase Act rights to acquire the buildings and select a Dantes Partners-led team to renovate the properties. DCHFA issued $59.2M in tax-exempt bonds and underwrote $43.6M in LIHTC equity for the deal.
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Varsity Investment Group secured a $33.4M loan to refinance two adjacent short-term rental buildings totaling more than 200 units in Georgetown: the Sonder Georgetown and the LuxUrban Georgetown. The buildings at 1000 29th St. NW and 1111 30th St. NW were previously the Georgetown Suites Hotel, which Varsity acquired in late 2020 and then converted to residential. BWE's Mark Remington and Alec Jenkin arranged the loan for Varsity from a private credit fund.
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Boston Properties secured a $105M loan to refinance its debt on the 231K SF office building at 500 North Capitol St. NW, it revealed in its earnings release this week. It said the new loan came with an interest rate of 6.83% and matures in June 2026. The building, which it acquired in 2010, is 99% leased to tenants including law firm McDermott Will & Emery and government consulting firm The Alpine Group.
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Marcus & Millichap announced Wednesday it arranged a $10.6M loan from M&T Realty Capital to refinance a 111-unit Southeast D.C. apartment property that was constructed in 1954. The property at 336 37th St. SE is owned by Kaye Stern Properties, Commercial Observer reported. The 10-year loan has an interest rate of 5.67% and a 68% loan-to-value ratio, according to Marcus & Millichap.
SALES
Finmarc Management sold the Largo Town Center retail property in Prince George's County for $70M to an investment group led by KPI Commercial LLC, Finmarc announced Monday. The 280K SF shopping center was 80% leased at the time of the sale, according to Finmarc, which acquired it in 2019 for $44M.
During its four years owning the asset, Finmarc said it added multiple tenants, including Burlington, Foot Locker and Urban Air Adventure. Other tenants include Shoppers Food Warehouse and Marshalls. John C. Donnelly Inc.'s John Donnelly and AdvisoRE LLC's Arthur Benjamin and Alex Alperstein represented the buyer. Joseph Hoffman of Kelley Drye Warren provided legal representation to Finmarc.
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Brookfield Properties sold an Old Town Alexandria office building for $29.5M to an affiliate of Melrose Solomon Enterprises, the Washington Business Journal reported Thursday. Brookfield bought the 125K SF building at 510 King St., named Courthouse Square, for $26M in 2021 as part of a large portfolio acquisition from WashREIT.
PERSONNEL
The Capitol Riverfront Business Improvement District Board of Directors announced Thursday it hired Emeka Moneme as the organization's new president. Monome most recently worked as a senior vice president at Hayat Brown LLC, and before that he held roles at Transurban, The Menkiti Group, WMATA, the D.C. Department of Transportation and Federal City Council.
Monome succeeds Michael Stevens, who led the BID for more than 17 years, guiding the Capitol Riverfront area through a massive development boom. The 480-acre district includes 50 multifamily buildings totaling over 13,000 units, 7.2M SF of offices, six hotels, 847K SF of retail and 14 acres of parks.
"I could not be more excited about the opportunity to join the Capitol Riverfront BID and steward its vision of a vibrant waterfront neighborhood — one that has a diversity of uses, inclusive population, and world-class public spaces and civic infrastructure,” Monome said in a release.
