Skanska Sells New NoMa Apartment Building For $141M
Skanska has sold the first of three buildings at its NoMa mixed-use development just as it is nearing completion.
The developer announced Thursday it sold RESA, a 326-unit apartment building at 22 M St. NE, for $141M to Northwestern Mutual.
The building features 7,431 SF of retail, where King Street Oyster Bar will open later this summer. It is part of Skanska's Tyber Place development, which is planned to include 585K SF of office space and another 23K SF of retail. The retail will open out to the NoMa Meander, a four-block pedestrian walkway planned to run from Pierce Street to New York Avenue.
The 12-story project topped out in March 2018 and was scheduled to deliver this quarter, but residents have yet to move in. Developers in D.C. often sell apartment buildings just before renters move in to avoid the Tenant Opportunity to Purchase Act process. Skanska Executive Vice President Mark Carroll said the company typically leases buildings prior to selling them to maximize value, but D.C. is unique because of the TOPA process.
"The D.C. market is a little bit different with some of the challenges related to selling multifamily projects," Carroll said. "Once you have tenancy in the building, there's an opportunity provided to tenants, and when you're trying to liquidate an asset, timing is important."
HFF's Walter Coker and Brian Crivella represented Skanska in the deal. Crivella said the property received strong interest from large institutional buyers like Northwestern Mutual.
"The interest was strong and I think that speaks to the quality of the development that Skanska built here and the quality of their brand and reputation," Crivella said. "It's a very thoughtfully designed and built asset, and I think that helped bolster the support in the market for it."
Sweden-based Skanska worked with Denmark-based architect Space Copenhagen to create the building's interiors with a Nordic-inspired design. The building has over 10K SF of amenities, including a rooftop terrace.
"The asset itself is a beautiful project," Carroll said. "One of the reasons we felt comfortable with putting it out for sale is it is different in the market from a design standpoint."
RESA is one of several new apartment projects in Northeast D.C.'s booming NoMa neighborhood. As of May, NoMa had 5,896 completed residential units, 858 units under construction and another 8,283 units planned, according to the NoMa BID.
The project represents the first D.C.-area multifamily development for Skanska, which has completed four office buildings in the District and in Rosslyn. Carroll said it is waiting to sign pre-leases before breaking ground on the two office buildings planned at the Tyber Place development.
The developer has another multifamily project planned in Tysons, where it is moving through the design phase for a 350-unit apartment building on a site it acquired last year.
The deal is not the first NoMa acquisition for Northwest Mutual. In 2010, it acquired the Two Constitution Square office building for $305M from what was then called StonebridgeCarras.
"RESA represents a unique opportunity for Northwestern Mutual to own a newly constructed, state-of-the-art apartment project in a highly desirable D.C. location that offers great access to public transportation and is within walking distance of a host of amenities and employers," Northwestern Mutual Real Estate's Peter Jahn said. "We are excited about this investment in one of the preeminent apartment markets in the country and confident that it will generate strong returns for our policyholders."
UPDATE, JUNE 20, 1:10 P.M. ET: This story has been updated to include comments from Carroll and Crivella.
