MRP To Buy Gallery Place, Key Piece Of Arena Deal, Out Of Distress
Gallery Place, the prominent mixed-use development that anchors the Chinatown area along with the neighboring Capital One Arena, is set to have a new owner.
MRP Realty was the highest bidder to acquire the property out of receivership and is expected to close the deal early this summer, pending court approval, the Washington Business Journal reported.
A source with knowledge of the deal confirmed it to Bisnow.
The 660K SF Gallery Place has been in receivership since May, and owner Oxford Properties had been shopping the loan secured by the property, the WBJ reported in October. It isn't clear how much MRP is paying for the loan, but the most recent receivership report, filed earlier this month, shows $179M of secured debt on the property and a total valuation of $327M, the WBJ reported.
The news comes a day after it was revealed that D.C.’s NBA and NHL teams, which had been preparing to move across the river to Virginia, will be staying at Capital One Arena, next door to Gallery Place. Sources told the WBJ the sale to MRP was set "well before" Wednesday's announcement.
A provision of the deal between Monumental Sports & Entertainment and the city would allow the team owner to expand its footprint by 200K SF at Gallery Place for programming. The agreement says the top floors of Gallery Place could be considered for a forthcoming practice facility for the Washington Wizards.
According to the terms, D.C. is also planning to put up $15M to upgrade the alley connecting the arena to Gallery Place, subject to a D.C. Council vote Tuesday.
The property has 260K SF of retail, 42% of which is vacant, and 229K SF of office, 85% of which is vacant, the WBJ reported, citing a February receiver report. Its retail tenants include Regal Cinema, Clyde's, Planet Fitness and an AT&T store.
The neighborhood has been one of the city’s most challenged areas over the last few years, amid a slew of retail closings, waning foot traffic and concerns over rising crime.
Violent crime in the neighborhood was up 36% in 2023, according to D.C. police data. The area right outside the building was one of the first the Metropolitan Police Department set up as a drug-free zone after the Secure D.C. legislation passed the city council earlier this month.
In December, Mayor Muriel Bowser set up a task force to turn around the Chinatown-Gallery Place area, including redeveloping the 5-acre arena in the event of the sports teams’ move. The task force is chaired by Edens CEO Jodie McLean, Uplands Real Estate principal Deborah Ratner Salzberg and Deputy Mayor for Planning and Economic Development Nina Albert.
