This Week's D.C. Deal Sheet

The NHP Foundation has secured $47.3M in financing to complete its renovation of a 1950s-era affordable apartment complex in Congress Heights. 

The nonprofit obtained funds from several public and private sources to launch the second phase of its overhaul of the 272-unit Ridgecrest Village property, according to deed records and an NHP spokesperson.

It began renovating the first 140 units in the fall of 2022 with $48.9M in financing, including upgrading the HVAC system, bathrooms and kitchens and creating a new community and laundry room. Phase 1 is set to be wrapped up in April, an NHP spokesperson told Bisnow. 

The second phase will renovate the remaining 132 units. The $47.3M for Phase 2 included a $13.2M bond issued by the Office of the Deputy Mayor for Planning and Economic Development and purchased by NewPoint Real Estate. The D.C. Department of Housing and Community Development provided a $23.2M Housing Production Trust Fund loan, D.C.’s Department of Energy and Environment provided a $5M grant, and DC Green Bank provided a $2.25M low-interest loan to finance “energy-efficiency enhancements.” The Department of Housing and Urban Development's HOME program also provided a $1M grant.

NHP purchased the property in 2019 from WC Smith through the Tenant Opportunity to Purchase Act. NHP and the apartment’s tenant association reached a deal to ensure the tenants retained a minority stake in the property, and NHP agreed to keep it affordable for those making between 30% and 80% of the area median income.

The project is D.C.’s first 501(c)(3) bond-backed residential development, NHP Foundation Assistant Vice President Pam Lee said in an emailed statement to Bisnow. 

“This will likely be the model for future transactions in the District, which previously would have been funded with 4% LIHTCs,” she said.

LEASES

Federal Realty Investment Trust inked two new tenants at Chesterbrook Shopping Center in McLean, the North Bethesda-based REIT announced this week. Beauty retailer Bluemercury is set to take 2,200 SF and open in early 2025, and medical spa SkinSpirit is expected to move into 2,900 SF this summer. 

Federal Realty purchased a majority stake in the 90K SF mall in 2021 after managing it for nearly two decades. The property at 6214 and 6246 Old Dominion Drive is undergoing an $8.5M renovation. Bagel shop Call Your Mother is planning a brick-and-mortar opening in the spring, adding to its mobile eatery already serving up bagels, lox and eggs at the mall. Small Door Veterinary is set to open this summer, followed by Sorn Thai toward the end of the year. 

***

California-based cybersecurity company Palo Alto Networks signed a 58K SF lease in Reston Town Center, the Washington Business Journal reported, citing a source familiar with the deal. The company is reportedly moving into Boston Properties’ newly delivered 20-story tower at 1950 Opportunity Way. The lease brings the 420K SF property near full lease-up, the WBJ reported.

MILESTONES

Boston Properties bought out the interest of its joint venture partner for a 548K SF office building at 901 New York Ave. NW. The REIT purchased the undisclosed partner’s 50% share in the building for $10M, and it assumed the partner’s $207M debt on the property, it revealed in its earnings release this week. It also bought out interests of joint venture partners of office properties in New York City and Santa Monica, California.

The D.C. acquisition followed a big renewal at the property. Law firm Finnegan, Henderson, Farabow, Garrett & Dunner renewed its 214K SF lease, Boston Properties CEO Owen Thomas said on the earnings call. The REIT developed the Mount Vernon Square building in 2005.

SALES

Finmarc Management sold a two-story Gaithersburg building with 25K SF of flex/office space for $4.4M, it announced Tuesday. The Bethesda-based company sold 620 E. Diamond Ave., just north of where I-270 meets I-370, to nonprofit Identity Inc., which plans to relocate its Gaithersburg headquarters and 50 employees to the property. 

The building was part of a nine-building portfolio with 342K SF of flex/office, commercial office, retail and warehouse space that Finmarc purchased in 2014 from First Potomac Realty Trust. The property was 50% occupied at the time of the transaction. KLNB’s Ken Fellows and Rob Pugh represented Finmarc, and CBRE’s Jhon Pacheco represented Identity Inc.

***

A 1970s-era office tower in Rosslyn planned for a residential conversion has sold at a discount of more than 80% from its last sale price in 2011. TIAA sold 1616 N. Fort Myer Drive, formerly home to Xerox, to an affiliate of Bethesda’s Dreyfuss Holdings, the Washington Business Journal reported. TIAA purchased the 300K SF, 19-story property in 2011 for $145M.

PERSONNEL

Greystone hired Leena Amin, who previously led Freddie Mac’s multifamily structured transactions team, as a senior managing director for structured finance based in Virginia, the company announced this week. Amin spent the last decade at Freddie Mac, where she also served in the multifamily capital markets division. In her new role, Amin will focus on Greystone’s bank and alternative capital relationships, as well as structured product advisory and capital markets offerings.

***

Marcus & Millichap announced two additions to its Institutional Property Advisors division. The firm hired longtime investment sales advisers Bob Dean and Jonathan Greenberg as senior managing directors. They will be located in D.C. 

Dean and Greenberg both come from CBRE, where they were executive vice presidents. Dean specializes in institutional property sales, and Greenberg focuses on multifamily investment property sales, both in the mid-Atlantic.