Developer Q&A: Ditto Residential CEO Martin Ditto
Boutique multifamily developer Ditto Residential is working on two nearby projects in the Hill East neighborhood. Ditto is redeveloping the historic Buchanan School at 1325 D St. SE into 41 condo units, and it is building another 44 units on Watkins Alley at 1309-1323 E St. SE. Bisnow caught up with Ditto Residential CEO Martin Ditto to hear about these projects and his thoughts on the neighborhood.
Bisnow: You're partnering with Federal Capital Partners and Insight Property Group on the Buchanan School redevelopment. Why did you decide to join this team and get involved with this project?
Ditto: They reached out to us and a couple of other developers and ultimately chose us to join this team, because they wanted a partner who would add value to the site, not just build something on it. We worked really closely with their team to create a brand around the whole site and also to bolster that with our own individual brands.
Bisnow: How are you designing these condos in the historic school property? What are they going to look like?
Ditto: Both the interior and exterior are fantastic. Obviously you can’t do much to improve an 1890s school exterior; it’s just gorgeous. What’s great about this project is it really is the melding of an 1890s school building with Ditto’s contemporary design that we’ve become known for. If you are a person who really loves historic architecture and the feel of a restored house or building then it can feel very comfortable and good for you. And if you’re a follower or a fan of our work, then it’s compelling from a contemporary architectural perspective.
Bisnow: When is it slated to deliver?
Ditto: It’s delivering mid-December. We already have our model and we have a few other models. We’re going to hopefully get a certificate of occupany in [the] next two weeks and then we’ll be ready to rock and roll.
Bisnow: Have you begun sales?
Ditto: We opened up sales about a month or so ago and we sold 50% of the units in nine days. It may be the fastest-selling condo in Washington. There’s pent-up demand for people who have wanted to get inside. So we were able to get them inside and they were excited to see it. Since then, we’ve slowed our marketing efforts because we want to wait until the lobby is finished. We're not pushing that right now. But we will do a huge push in [the] next couple of weeks once the lobby is fully built out and ready to go.
Bisnow: What is the price point for these condos?
Ditto: The exciting thing about this building is, in the past we’ve built so many high-end condos that sold in the $1M to $1.8M range, we’ve had people saying "I love your stuff but it’s not in our price range." So in this building, we have units from $375K all the way to $1.3M. It’s a cool range.
Bisnow: What do you think redeveloping the site of an old shuttered school will do for the Hill East neighborhood?
Ditto: What’s awesome about this neighborhood — I used to live on Capitol Hill — this neighborhood has been strong for a long time. For existing residents, it brings a use to these vacant, abandoned or underutilized spaces, like the garage across the street. For the new residents, it provides an opportunity to enter the Hill without displacing existing residents. All of these people are moving into new apartments and houses that weren’t there before. No one’s being kicked out, and yet they’re able to move into this exciting, vibrant neighborhood we’re creating with our partners. These alleys that were formerly places that big 18-wheelers would drive down and scare people are being widened and are going to be these living, breathing walkways. That’s what's so exciting about this whole project. It’s not just us building these front-facing buildings that turn their butts to the alley. It’s harder to do, but we’re building buildings that have fronts on the street and have friendly pedestrian access on the rears.
Bisnow: Around the corner from the Buchanan School, you're partnering on another project to build 44 units on Watkins Alley. Why did you decide to get involved in this project?
Ditto: The reason we partnered on that project and lots of other projects is we see ourselves, and we’re increasingly being seen in the community, as not necessarily a competitor in the multifamily space but as a collaborator. We have a product, whether that’s high-end condos or the Oslo model or an efficient rental building or townhouses. We can bring to a development partner an expertise that maybe they don’t have, or in the case of a couple of our partners, they don’t want to do for-sale condos. We love that. We can go in with them either in a partnership or an outright sale and really bring our expertise and our product and our brand and add value to the overall model. So that’s the reason we are so interested in partnerships. We think about partnerships as being our future.
Bisnow: What do you like about Watkins Alley? What makes that project interesting?
Ditto: Watkins Alley is an amazing second phase to Buchanan. So Buchanan has wonderful amazing townhouses being built by Insight and FCP, and it has our condominum project ranging from $375K to $1.3M. What I look at Watkins as is this incredible Phase 2 of that site. The reason it’s such a cool opportunity is we have a pretty good range of units here. The units range from $400K flats up to $1.5M townhouses. Back in the 1970s, it was popular and accepted that people of moderate means would live next to people of greater means in a market-rate environment. Today, that doesn’t happen as much. What’s fun about this project is you have a large diversity of people. You have diversity of ages, diversity of incomes, and all in this very cool, contained community, which is accessed via some really neat pedestrian hallways and located in an alley.
Bisnow: In this same section of Hill East, Foulger-Pratt is building a 329-unit Safeway-anchored development, and Insight Property Group is working on another 160-unit project. With all of this development happening in this immediate area, what is it going to look like in a few years when it's all done? How do you see this all transforming the neighborhood?
Ditto: It’s hard to imagine exactly the way something feels once everyone has moved in. I think it’ll feel like an extension of Eastern Market, where we have thoughtfully produced retail and commercial space nestled into a really cool existing townhouse neighborhood, and it's accessible to Metro. The Hill is a very large neighborhood, one of [the] biggest neighborhoods in D.C., and large parts of the Hill are not Metro-accessible. This is a really neat neighborhood with neighborhood-serving retail. It has two top-end groceries, the new Safeway is going to be the largest Safeway in the city. You have all this in an existing neighborhood. That’s what’s so cool. How often are we developing in what people call developing neighborhoods? In this case, it's a wonderful existing neighborhood, and we’re coming into this small patch of industrial and underutilized educational land, and we're able to bring best-in-class development.
Bisnow: D.C. proposed a nearby site on Hill East as one of the submissions for Amazon HQ2. What do you think its chances are? Do you think that’s a good site for Amazon and what would it do for the neighborhood?
Ditto: It’s impossible to know. Only Jeff Bezos and his executive committee can tell you where they’re going to end up going. I think the D.C. Metro area has a good chance of landing HQ2. But I think it's a mixed bag, with the amount of government subsidies that would go towards attracting that type of development. You can call it economic development, but if you pay a dollar to get a dollar, is that economic development? Not only that, but imagine what that would do to housing prices in D.C. for people who don’t work for Amazon. Bob, who is a janitor at a multifamily building, when Amazon shows up to D.C., Bob’s not going to get paid more, but his cost of living is going to change. So for me, in an area that’s already so successful and healthy, I think that if Amazon comes that’s great, but if they don’t come that’s fine too.
