JBG Selling 2,664-Unit Alexandria Portfolio Where It Had Massive Development Plans
As it prepares its $8.4B merger with Vornado, The JBG Cos is abandoning one of the biggest placemaking projects it had planned in the region.
The Chevy Chase-based developer is looking to sell its six-property, 2,664-unit apartment portfolio in Alexandria's West End. The portfolio also includes a 63,320 SF retail center that is home to a Global Food, a Starbucks and a CVS Pharmacy. The six garden-style apartment communities are known as Brookdale, Hillwood, Stoneridge, Lynbrook, Meadow Creek and Willow Run.
The apartments, which are 95% occupied, sit in the shadow of Mark Center, an office complex that is home to the Institute of Defense Analysis. IDA is leaving the Mark Center for Potomac Yard, where it purchased the site for its new HQ from JBG and MRP Realty.
The developer had planned a massive project for the 130-acre site to be phased over 30 years. JBG's development would have begun with the retail-heavy Beauregard Town Center to create an amenity base for the neighborhood. This first phase had originally included 1,150 units and 150k SF of retail but was scaled back last summer to 573 units with 109k SF of retail.
The area has already been zoned for more than 6M SF of development as part of Alexandria's Beauregard Small Area Plan, so prospective buyers would likely continue with a similar plan to what JBG had in mind.
CBRE executive vice president Mike Muldowney and senior vice president Bob Dean, who began marketing the portfolio last week, said they are looking to sell it either as a full package or sell off the apartment communities individually. The brokers said the site is already getting phenomenal interest in its first week. They plan to market the property for four to five weeks and then call for offers.
"People from large-scale private equity firms from New York are digging in, given the size and scale of the opportunity," Dean said. "You’re seeing that, and of course local investors who know the market are digging in as well."
Whether it is a local or a national investor, whoever buys the property will be able to hit the ground running on development plans. With the site already entitled for the additional density, the new developer could begin work on its site plan and design. Alexandria economic development head Stephanie Landrum said JBG had already put the project on pause following the Vornado merger, so a new developer acquiring the site could help give the project momentum.
"There’s the ability through the approved plan to sort of rebuild a community in the Beauregard area that is anchored with this town center concept," Landrum said, "to create a new sense of place and activity."
Landrum said the site will be attractive to developers that have experience building affordable housing alongside market-rate projects.
"It will be interesting to see if the eventual winning bidder is somebody who has experience doing blended, mixed-income communities," Landrum said. "Part of the approval was building new and protecting market-rate affordable units so we’re not displacing what has been market-rate affordable."
Alexandria is creating a new Bus Rapid Transit system for the neighborhood to improve accessibility. The lack of a nearby Metro station is a likely reason why the site was not included in JBG Smith's portfolio, which included only Metro-served assets.
JBG could not be reached for comment. Muldowney said the portfolio did not fit in with the higher-end development platform JBG Smith is assembling.
This comes as Vornado is also halting some of the NoVa projects it had planned. The developer shelved the 933-unit addition it had planned for its RiverHouse apartments in Pentagon City. It also put on hold two of its Crystal City projects, which included a 12-screen multiplex and 31k SF of retail, plus two new retail pavilions at 2101 and 2201 Crystal Drive.
Correction, Feb. 24, 10:55 A.M. EST: The retail center in this story is 63,320 SF and the amount of units that JBG is selling is 2,664. Those numbers were misstated in a previous version of this story. The quote attributed to Dean had previously been attributed to Muldowney. It has been updated.
