Brandywine Makes Call To Sell The Bullpen To Skanska For Redevelopment

Global real estate firm Skanska has acquired the property at 25 M St. SE for $25.7M from Brandywine Realty Trust.

The site, one block north of Nationals Park, since 2009 has been home to The Bullpen, a popular outdoor venue lined with shipping containers that hosts live music and serves food and drinks.

Skanska announced the acquisition Wednesday and has not detailed its plans for the 32K SF site, but told Bisnow in a statement it is focused on creating "one of the healthiest, most sustainable and flexible modern office environments in an ideal location."

"Every site is an opportunity to do something special and we are always looking at ways that we can go one step further with the next building," Skanska Executive Vice President Mark Carroll said in the statement. "We are revisiting the master plan and site use that would best align the project to the future needs of the area, but we are too early in the process to share more details."

Capitol Riverfront Business Improvement District Executive Director Michael Stevens, whose district includes the site, said he is excited to welcome Skanska back to the neighborhood — the firm sold the office building it developed a block away two years ago— and he said the BID could help find a replacement site for The Bullpen if necessary. 

"The Bullpen has served an important function in the neighborhood as a temporary use that provided an outdoor festival atmosphere for Nats fans and other visitors," Stevens said. "The BID could assist in evaluating other sites for them if they ask us to do so, but we do not control property or lease space. We do inform our property owners of opportunities for new uses that are looking to locate in Capitol Riverfront, or for existing uses that may need to relocate."

While The Bullpen has operated since 2009, it was never meant to last this long.

Akridge, which acquired the property in 2008, had long planned to develop offices on the site once it found an anchor tenant and had planned to move The Bullpen to another lot near Audi Field once that redevelopment was underway.

Earlier this week, Akridge closed a deal to move forward with a mixed-use development on one of the two vacant city blocks it owns near Audi Field, but CEO Chip Akridge told Bisnow Thursday he hasn't ruled out bringing a concept like The Bullpen to the other block. 

"We have not made any effort in that regard, but we might," Akridge said. "We may decide we're not going to use that city block for a few years, so we may bring something on there, but we don’t have any plans at the moment."

Akridge sold the 25 M St. SE parcel to Brandywine Realty Trust in 2015 for $20M, but it stayed on as a partner for a proposed 275K SF office building, UrbanTurf reported at the time.

In late 2016, The Bullpen shrank somewhat to accommodate JBG Smith's West Half residential project on the southern portion of the parcel.

But the 25 M St. office project has yet to materialize. Instead, Brandywine has sat on the site, allowing the Bullpen to host performances and Nationals fans as an open-air gathering spot as the pandemic damaged the office market.

Skanska hasn't said whether it would break ground on an office building before signing a lease, but it does have a history of building spec office in the neighborhood. The developer broke ground speculatively in 2015 on the building at 99 M St. SE, and it later signed multiple tenants before selling the building. It also broke ground speculatively in 2015 on an office building at 2112 Pennsylvania Ave. NW, where it later landed a law firm as an anchor tenant. 

The sale occurs as Capitol Riverfront, a 460-acre district that encompasses the Ballpark area, Buzzard Point and Navy Yard, rapidly approaches full build-out.

As of last quarter, Capitol Riverfront's office vacancy rate is 19%, according to CBRE, roughly the city average but more than double the rate of NoMa, another neighborhood in a similar stage of redevelopment.

Since 2007, the submarket has seen more than 10,000 residential units deliver and nearly 7M SF of commercial office space, according to the Capitol Riverfront BID.

Today, the only office space under construction in the neighborhood is a three-story addition to Columbia Property Trust's building at 80 M St. SE, according to CBRE, despite the BID projecting there is still more than 2M SF of office space possible in the area at full build-out.

And 25 M St. is the last piece of land available for redevelopment on Half Street SE and one of the last core development sites in Capitol Riverfront, Skanska said.

More change may also be on the way for Nats fans attending the ballpark nearby: the Lerner family, which owns real estate in Navy Yard and throughout the D.C. region, recently said they are considering a full or partial sale of the team.

UPDATE, APRIL 21, 3:45 P.M. ET: This story has been updated with new comments from Chip Akridge.