Since January, 2003
            
 (a random before-and-after moment)
February 10, 2007
June 16, 2018
Half at K, Looking North-Northwest (see more)

With an instruction to residents to Please Don't Panic, I'll pass along the news that Onyx on First, the 266-unit apartment building at 1100 1st St. SE, is up for sale. With a brochure touting "Excellent Transportation Infrastructure, Phenomenal Employment Opportunities," and "Shopping and Entertainment Options Abound," the sellers look to be trying to get in on what is clearly a rebounding multifamily market in DC.
Apparently there's no price set for the sale, and with a building that's 92 percent occupied with what looks like pretty high average rent numbers, I imagine investors will be taking a close look. The eventual sale (should there be one) could also be an interesting barometer of how "the markets" view the neighborhood. Proposals are due April 14.
The building, originally planned to be condos but converted to apartments during the construction phase, was developed by Faison and the Canyon-Johnson Urban Fund and completed in 2009. It was built the same time as its neighbor 100 M, the office building that recently bought for $57 million in a foreclosure sale. Onyx is on the same block as the New Jersey Avenue entrance to the Navy Yard Metro station, two blocks north of Nationals Park, and one block west of the Courtyard by Marriott that is being bought for $68 million. And, of course, just across the street from the Market Deli.
You can see my Onyx project page for photos and more information.
Comments (12)
   
 
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Comments

F says: (3/8/11 10:08 PM)
It's interesting that the brochure does not mention its close proximity to a soon-to-be-designated-historic-deli.


G says: (3/9/11 10:13 AM)
As long as they keep that name - "Onyx!" - I'm happy.


Charles says: (3/9/11 11:29 AM)
It is interesting that the rental rate maxes out with a $3.25/sf cap on income. Meanwhile, assuming the common area expenses, taxes, payroll, property management and CapEx run at or near 40% of income (fairly generous), we are talking a bottom line of roughly $2/sf.

Meanwhile, Rep Garber still has failed to respond to the financial modeling detailing the gross economic failings of his proposed "Corner Grocer", which, it should be noted, fails despite assuming an aggressive $3.80/sf NNN. (For those that might need clarification, NNN stands for triple-net and requires the tenant to pay all taxes, insurance, utilities, regular maintenance and repairs.)

It seems to me that Rep. Garber has proffered nothing more than a recipe for an abandoned building remaining as such for years and years to come. At best, we will be saddled with a “historic” eyesore.

In other news, one has to wonder if Onyx's new owner will continue offering the very healthy rent incentives and whether such owner is bound to the existing tenant’s – many of whom received verbal assurances that they would remain in place. It is not a stretch to believe that many residents might be looking at a very different picture than they originally contemplated when their renewal date arrives.

Very interesting times abound for those that live at the intersection of 1st and L Streets!


Ishmael says: (3/9/11 11:59 AM)
"...and whether such owner is bound to the existing tenant’s – many of whom received verbal assurances that they would remain in place."

I'm no lawyer, but if it is not written into someone's lease, then I can guarantee that the new owner will not have to honor it. I doubt that a verbal assurance from a low-level Onyx employee, who may or may not have a job once the building is sold, carries no legal weight.


Jenniferpdc says: (3/9/11 5:02 PM)
Charles - since you seem interested. The effective rental rate at the Onyx is considerably less than the $3.15/psf that the broker is listing as the "market" rental rate. At this time the newest and best located apartments in DC are topping out at around $3.50/psf for the market rate, but concessions in this building are probably still running close to 10%. I'm betting their economic occupancy is considerably less than 90%. Operating expenses for a high-rise of this nature generally range from 25% to 30%. I generally can't comment on this site, because I'm party to confidentiality agreements (I work for commercial real estate investors - and believe me I have alot to say about 225 Virginia Ave) but I don't have ths book yet. If taking the potential gross rent of about $7.2M, minus vacancy, concessions, etc. (based on the location, I would estimate at about 12%)and adding other income (parking, etc.) of about $2K/unit and then deducting operating expenses estimated at 30%, you would get an NOI of about $4.8M. DC multi-family is very hot right now, and Fannie/Freddie are giving out long-term money very cheap (although it's gone up significantly in the past couple of months), someone will probably pay for this based on a capitalization rate around 5.25%, estimating the value at around $90M ($340K/unit - which actually seems a little light on a price per pound basis).


Charles says: (3/10/11 9:24 AM)
Jennifer - Thanks for the insights. I really like your math and perspective. Your trading value of $91,429,000 does seem light on a per unit basis, but does translate to roughly $478 a square foot - a number that feels more palatable to me. Plus, this number does provide a buyer some upside (as the significant concessions should slowly disappear) against a relatively low cap-rate.

In regard to your 30% number, I totally agree. I should have done a better job of clarifying that the 40% number proffered included concessions, which I understand are generous on this particular property. At $2/sf the annualized NOI number at which I arrived was a bit lower than your $4,800,000 - coming in at about $4,590,000.

One final thing, if you have the time and given your knowledge about this specific marketplace, I would really appreciate your thoughts on realizable retail rents. My understanding is that between BID and DC taxes, there is a stiff headwind, which might partially explain the lack of real restaurant options.


Jenniferpdc says: (3/11/11 12:50 PM)
Retail has been a little funny the past couple of years given the economy, but generally 1st floor retail in office downtown, asking rates range from about $40 to $50 NNN, depending on the location. Banks pay higher (sometimes alot higher for prime corner locations), larger tenants less. Grocery stores and pharmacies are generally less than $10 NNN. I've seen a couple of deals in prime downtown location on Metro in about the mid-$50's, in the mid-$40's for restaurants or lesser locations, but new buildings. The thing is, the landlords are buying alot of these deals by very large tenant improvements packages, $125+ for only five year deals with free rent added in.

The owners around here are actually asking on average higher than downtown, in the high-$40's, which is highly unlikely. My guess is they will go alot lower than that if they could find a tenant.

My understanding, although I haven't seen the actual comp, is that Bureau of Land Management signed for about $33-$34 FS for the space they took in Lerner's building, signficantly lower than the orginal $46 they were asking.



58Model says: (3/11/11 3:22 PM)
I was told there would be no math...


Charles says: (3/11/11 4:21 PM)
Jennifer: Thanks for the tremendously useful information. As you might have seen in other posts, in addition to believing the "historic" bases for the Market Deli's nomination severely lacking, I have made arguments elsewhere that there is simply no economic underpinnings supporting David Garber's claim that a corner grocer will return to the space.

These numbers go a long way to proving out the fallacies in his logic and demonstrate that should such nomination prove successful, the only result with be the slow and continued dilapidation of the existing structure.

Thank you! Charles


David Garber says: (3/11/11 5:27 PM)
Charles,

Although I applaud your dedication to this cause, let me clear something up: I never claimed that a corner store would return to the space. I did say that if restored (and if it is landmarked, it is likely that it will eventually be restored), then it will be a desirable retail space.

My dedication to quality design and development in this neighborhood remains the same as it was during my campaign. If all land-use and design decisions were made with only the $/sf in mind, we would have a very sad looking city. I have been very supportive of Akridge's work in the neighborhood, and have kept them in the loop on all of my acclamations and concerns for each of their projects. I hope you all will do the same for me, as I am constantly meeting with and working with the people who are shaping the neighborhood.

I don't expect us to agree on every issue, but I do hope that our conversations will remain civil. I'll continue to do my best to keep the neighborhood informed about the initiatives I engage with here.

Again, I hope to see any and all at the Market Deli tomorrow morning, if only to have the chance to meet in person.


Charles says: (3/11/11 6:20 PM)
David:

David, in all civility, I think you have made a huge mistake, which has only been compounded by your subsequent actions. I have been vocal and consistent about this and I regret if my passion in believing your actions egregious and fully considered basis offends.

However, words and actions have meanings and I am afraid that you merely stating your "dedication to quality design and development" does not make it so. The quality design in the instant case is a ramshackled building that has gone without upkeep (or a tenant) for roughly 14-years. And your "support" for development is to sandbag the developer by filing this only upon their requesting a raze permit.

Again, words have meanings. While you protest that you constantly meet with people shaping the neighborhood, you conveniently avoided such public meetings prior to scurrying to the NW to find someone to sponsor your initiative. This despite openly acknowledging that this would be a subject of controversy.

Finally, you have failed to provide any reasonable set of economic analysis which sets forth a viable plan for the space at issue to find a tenant. Even if successful, your efforts would do nothing other than protect an empty and decaying structure, which should probably be condemned, undermining the growth and positive directions found elsewhere in our area.

Again, in case you missed it, you did this without calling a meeting and consulting your constituents.

Regards,
Charles


Charles says: (3/11/11 6:23 PM)
Sorry. Typo.

I meant to say "not fully considered basis" at the ending of the second sentence of the first paragraph.

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City Government Data for Near Southeast Records added or updated recently displayed here; click the "archive" links to see additional detail and older records. All data from DC Government databases and RSS feeds. JDLand takes no responsibility for errors, omissions, etc. (read CapStat disclaimer). Data is retrieved daily.

Recent Crime Incidents Archive  
UNIT B/O M ST SE   THEFT
Theft 2nd Degree (all Other Larceny)
 03/11/19
200 B/O L ST SE   THEFT FROM AUTO
Theft First Degree (theft From Motor Vehicle)
 03/08/19
400 B/O M ST SE   THEFT
Theft 2nd Degree (all Other Larceny)
 03/07/19
400 B/O M ST SE   THEFT
Theft First Degree (theft From Building)
 03/06/19
1100 B/O NEW JERSEY AVE SE   THEFT
Theft 2nd Degree (all Other Larceny)
 03/05/19
300 B/O TINGEY ST SE   THEFT
Theft 2nd Degree (all Other Larceny)
 02/28/19
400 B/O M ST SE   THEFT
Shoplifting
 02/26/19
400 B/O M ST SE   THEFT
Theft 2nd Degree (theft From Building)
 02/25/19
1100 HALF ST SE   THEFT
Theft 2nd Degree (theft From Building)
 02/24/19
400 B/O M ST SE   THEFT
Shoplifting
 02/23/19
1100 B/O NEW JERSEY AVE SE   THEFT
Theft 2nd Degree (all Other Larceny)
 02/22/19
400 B/O M ST SE   THEFT
Theft 2nd Degree (theft From Building)
 02/22/19
1300 B/O WATER ST SE   THEFT
Theft 2nd Degree (all Other Larceny)
 02/18/19
400 B/O M ST SE   THEFT
Theft 2nd Degree (all Other Larceny)
 02/17/19
400 B/O 2ND ST SE   THEFT FROM AUTO
Theft (theft From Motor Vehicle)
 02/16/19
70 B/O I ST SE   ASSAULT WITH A DANGEROUS WEAPON  02/15/19
500 B/O L ST SE   ROBBERY  02/14/19

Recent Issued Building Permits Archive  
1017 3RD PL SE   
03/14/19 
JAUVON M GILLIAM / null
PP1902068 / POST CARD
1331 4TH ST SE CU   
02/22/19 
FC 1331 LLC / null
P1904018 / SUPPLEMENTAL
   
03/13/19 
FC 1331 LLC / null
E1905237 / SUPPLEMENTAL
1346 4TH ST SE   
03/04/19 
FC 1346 LLC / BOB BIROONAK; N/A
SG1900084 / CONSTRUCTION
One illuminated building sign and one double face illuminated blade sign
2 EYE ST SE   
03/12/19 
null / MIKE BOONE
AH1900650 / CONSTRUCTION
PEPCO-ALLEN-CREWS NEED TO REPLACE CABLE AT #2-EYE ST SE. 11PM-5AM 3 / 14 / 19-3 / 15 / 19
2 I ST SE   
02/22/19 
MCDONALDS CORPORATION / null
P1904020 / SUPPLEMENTAL
150 I ST SE   
02/19/19 
SQUARE 737 LLC / DANIEL R. RUDE
P1903909 / SUPPLEMENTAL
(4) Fire pits (1) Water Coolers (4) Rooftop units Sanitary piping, Storm piping
   
02/21/19 
WILLIAM C SMITH CO / null
E1904635 / SUPPLEMENTAL
   
03/15/19 
SQUARE 737 LLC / WILLIAM MOORE
AH1900647 / CONSTRUCTION
afterhours to take down tower crane with mobile crrane saturday 3 / 16 / 2019 and sunday 3 / 17 / 2019 from 4am tp 1159 pm
328 I ST SE   
02/22/19 
BRIAN HUSEMAN / MATTHEW MALASKA
P1904003 / SUPPLEMENTAL
   
03/06/19 
BRIAN HUSEMAN / JAMES W MONTGOMERY
E1905028 / SUPPLEMENTAL
212 M ST SE   
03/04/19 
SQUARE 769 LLC / BRIAN WARNER
UT1900015 / CONSTRUCTION
Remove an unknown number of USTs as they are encountered during construction activities.
250 M ST SE   
02/21/19 
SQUARE 769 LLC / BRIAN C STROTT
B1813732 / CONSTRUCTION
9 story office building with 3 levels below grade. 188,000 gross sqft
300 M ST SE   
03/08/19 
FEDERAL CENTER LP / SAM HOLLEN
B1906302 / CONSTRUCTION
INSTALL NEW FIRST FLOOR SUITE ENTRY DOOR WITH CARD READER TO VACANT TENANT SPACE. INSTALL INTERIOR CONCRETE RAMP WITH 4 INCH ELEVATION CHANGE. PROVIDE EXIT LIGHT AND EXTERIOR LIGHT FIXTURE. 100 SQUARE FEET.
861 NEW JERSEY AVE SE   
03/11/19 
CONSOLIDATED RAIL CORPORATION / JOHN WYCKOFF
SB1900174 / CONSTRUCTION
An environmental assessment will be conducted at the parcel located 861 NJ Ave., SE involving installing 10 soil borings, 7 soil borings will be drilled to a depth of approimately 20 feet bgs and hree soil borings will be drilled to a depth of approximately 50 feet bgs. The soil borings will be drilled and the soil sampled using direct push technology (DPT) dual tube tooling 3.75. All cuttings ...
880 NEW JERSEY AVE SE   
02/21/19 
880 NEW JERSEY AVENUE LLC / CLYDE HURST; CHRISTOPHER P COWIE
B1901729 / CONSTRUCTION
alterations to an existing 688 SF vacant space to add mechanical, plumbing and electrical fixtures to accommodate a future tenant. Future tenant fit out will be provided under a separate permit. This permit is for the landlord work only. The existing space is recently constructed building shell that has not been occupied by a previous tenant.
1299 NEW JERSEY AVE SE   
03/01/19 
UNITED STATES OF AMERICA / MAHMOUD KHACHAN
SB1900167 / CONSTRUCTION
Temporary Geotechnical Soil Borings Number of Borings: 2 Diameter of Boreholes: 6 inches Depth of Borings: 55 ft Drilling Method: Mud Rotary Abandonment Method: Tremie Grouting with Bentonite grout
79 POTOMAC AVE SE   
03/11/19 
RIVERFRONT HOLDINGS I LLC / null
E1905174 / SUPPLEMENTAL
227 TINGEY ST SE L1   
02/28/19 
UNITED STATES OF AMERICA / JOHN MCDONALD
P1904187 / SUPPLEMENTAL
AH = After Hours; B = Alteration & Repair; D = Demolition; E = Electrical; FB = Boiler; M = Mechanical; P = Plumbing and Gas; PC = Post Card; R = Raze; SG = Sign; TL = Tenant Layout; TN = Tent; RW = Retaining Wall;

Real Property Sales Archive  
No commercial transaction records added or modified in the past two weeks.


Project Directory
Completed
New DC Water HQ ('19)
Yards/Bower Condos ('19)
Virginia Ave. Tunnel ('19)
99 M ('18)
Agora ('18)
1221 Van ('18)
District Winery ('17)
Insignia on M ('17)
F1rst/Residence Inn ('17)
One Hill South ('17)
Homewood Suites ('16)
ORE 82 ('16)
The Bixby ('16)
Dock 79 ('16)
Community Center ('16)
The Brig ('16)
Park Chelsea ('16)
Yards/Arris ('16)
Hampton Inn ('15)
Southeast Blvd. ('15)
11th St. Bridges ('15)
Parc Riverside ('14)
Twelve12/Yards ('14)
Lumber Shed ('13)
Boilermaker Shops ('13)
Camden South Cap. ('13)
Canal Park ('12)
Capitol Quarter ('12)
225 Virginia/200 I ('12)
Foundry Lofts ('12)
1015 Half Street ('10)
Yards Park ('10)
Velocity Condos ('09)
Teague Park ('09)
909 New Jersey Ave. ('09)
55 M ('09)
100 M ('08)
Onyx ('08)
70/100 I ('08)
Nationals Park ('08)
Seniors Bldg Demo ('07)
400 M ('07)
Douglass Bridge Fix ('07)
US DOT HQ ('07)
20 M ('07)
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Marine Barracks ('04)


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