Since January, 2003
            
 (a random before-and-after moment)
February 2006
June 16, 2018
1st at N, Looking South-Southwest (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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Recent Crime Incidents Archive  
400 B/O M ST SE   THEFT
Shoplifting
 10/17/18
100 B/O N ST SE   THEFT
Theft 2nd Degree (all Other Larceny)
 10/17/18
700 B/O L ST SE   THEFT FROM AUTO
Theft 2nd Degree (theft From Motor Vehicle)
 10/10/18
50 M ST SE   THEFT FROM AUTO
Theft 2nd Degree (theft From Motor Vehicle)
 10/08/18
1100 B/O 10TH ST SE   THEFT
Theft 2nd Degree (all Other Larceny)
 10/07/18
100 B/O M ST SE   ROBBERY  10/05/18
700 B/O L ST SE   THEFT FROM AUTO
Theft First Degree (theft From Motor Vehicle)
 10/04/18
1100 B/O NEW JERSEY AVE SE   THEFT
Theft 2nd Degree (theft From Building)
 09/28/18
1100 B/O 1ST ST SE   THEFT FROM AUTO
Theft (theft From Motor Vehicle)
 09/27/18
100 B/O L ST SE   THEFT FROM AUTO
Theft 2nd Degree (theft From Motor Vehicle)
 09/26/18
100 B/O L ST SE   THEFT
Theft 2nd Degree (all Other Larceny)
 09/26/18
400 B/O M ST SE   THEFT
Theft 2nd Degree (all Other Larceny)
 09/26/18
1100 B/O 5TH ST SE   THEFT FROM AUTO
Theft (theft From Motor Vehicle)
 09/24/18
150 B/O L ST SE   THEFT FROM AUTO
Theft (theft From Motor Vehicle)
 09/22/18
700 B/O L ST SE   THEFT FROM AUTO
Theft First Degree (theft From Motor Vehicle)
 09/22/18

Recent Issued Building Permits Archive  
1100 2ND PL SE   
10/12/18 
null / DONNA G GRAHAM
AH1900071 / CONSTRUCTION
WR #3585809 - M.ALLEN / A.PRICE - 1100 2ND PLACE SE - PEPCO CREWS WILL BE SPLICING CABLES AT NIGHT STARTING 10 / 15 / 18 UNTIL 11 / 2 / 18 FROM 10:00 PM TIL 7:00AM MONDAY THROUGH SUNDAYS
1346 4TH ST SE   
09/28/18 
ALAN OWINGS / ROBERT HENRY
AH1801345 / CONSTRUCTION
After Hours Permit for 10 / 08 / 2018 to perform construction work with the below activities: Interior Operations: 7AM - 7PM - ADVANCED NOTICE TO RESIDENTS, OPERATION CONTACT PERSON ON SITE TO ADDRESS ANY UNEXPECTED NOISE ISSUES BEFORE 9:00AM WITH CONTACT NAME AND TELEPHONE. Exterior Operations: 9AM-7PM - NO EXTERIOR ACTIVITY, TRAFFIC, NOISE GENERATION BEFORE 9am WITH ON SITE OBSERVANCE. ...
   
10/09/18 
FC 1346, LLC / null
E1900300 / SUPPLEMENTAL
   
10/18/18 
FC 1346, LLC / DFM DEVELOPMENT SERVICES, LLC
B1809670 / CONSTRUCTION
Parcel O-2 at the Yards. Revision to Permit B1610576 for installation of flood wall on 5th Street, SE, the reduction of roadway width, and widening of sidewalk to provide adequate pedestrian clear space between flood wall and edge of tree pit. TPR
2 I ST SE   
09/25/18 
MCDONALDS CORPORATION / TAMIKA STATON; OTIS
EN1802612 / SHOP DRAWING
Install 1 New G2S Elevator - 4000LBS @ 350FPM
   
09/25/18 
MCDONALDS CORPORATION / TAMIKA STATON; OTIS
EN1802611 / SHOP DRAWING
Install 3 new G2S Elevators - 3500LBS @ 350FPM
   
09/26/18 
MCDONALDS CORPORATION / null
E1811060 / SUPPLEMENTAL
   
10/09/18 
CRESECENT CAPTIAL VIEW / null
P1900223 / SUPPLEMENTAL
   
10/17/18 
MCDONALDS CORPORATION / DONNA G GRAHAM
AH1900080 / CONSTRUCTION
WR #3573836 - M.ALLEN / BRUNO - WARD 6 - 20003 - PEPCO CREWS WILL BE WORKING #2 I ST SE - MAY NEED TO BLOCK "I" STREET ON OCCASION TO INSTALL NETWORK TRANSFORMERS AND INSTALL AND SPLICE CABLES - CREW WILL BE WORKING AT NIGHTS DURING THE WEEK (MONDAY-FRIDAYS) FROM 9PM TIL 7AM - PEPCO CREWS WILL ALSO BE WORKING SATURDAY AND SUNDAYS FROM 6AM TIL 6PM - WORK IS ONGOING
4 I ST SE   
10/09/18 
CRESCENT COMMUNITIES / null
P1900221 / SUPPLEMENTAL
328 K ST SE   
09/27/18 
MARK BARRETT / null
E1811075 / SUPPLEMENTAL
   
10/04/18 
MARK BARRETT / BJORN FALK
SOL1800999 / CONSTRUCTION
Installation of a 5.559kW solar PV system. Roof mounted, 17 panels with integrated microinverters.
401 L ST SE   
10/11/18 
MICHAEL R BRICKMAN / FLOYD H. FURR
P1900299 / SUPPLEMENTAL
   
10/11/18 
MICHAEL R BRICKMAN / DARIUS LYVERS 703-491-1234
M1900108 / SUPPLEMENTAL
300 M ST SE 8 20024   
09/24/18 
BARBARA D HAMLETT / null
P1809404 / SUPPLEMENTAL
300 M ST SE   
09/25/18 
FEDERAL CENTER LP / null
E1811000 / SUPPLEMENTAL
   
09/25/18 
FEDERAL CENTER LP / null
E1811001 / SUPPLEMENTAL
   
09/25/18 
FEDERAL CENTER LP / null
E1810999 / SUPPLEMENTAL
400 M ST SE   
10/18/18 
CAPPER SENIOR 11 LIMITED PARTNERSHIP / null
E1900650 / SUPPLEMENTAL
1111 NEW JERSEY AVE SE   
10/17/18 
GALLERY CAPITOL RIVERFRONT PROPERTY LLC / null
E1900581 / SUPPLEMENTAL
79 POTOMAC AVE SE 1ST FL   
10/03/18 
RIVERFRONT HOLDINGS I LLC / null
P1900101 / SUPPLEMENTAL
71 POTOMAC AVE SE   
09/28/18 
FORIDA ROCK PROPERTIES INC / BARR CONCRETE
AH1801325 / CONSTRUCTION
After hours to pour concrete with pump truck 9 / 28 / 2018 to 10 / 28 / 22018 from 11pm to 7am
   
10/04/18 
FORIDA ROCK PROPERTIES INC / BARR CONCRETE
AH1900029 / CONSTRUCTION
Afterhours to pour concrete with pump truck saturday 10 / 06 / 2018 from 12am to 7am
79 POTOMAC AVE SE   
10/04/18 
RIVERFRONT HOLDINGS I LLC / null
M1900054 / SUPPLEMENTAL
201 TINGEY ST SE   
10/09/18 
JBG/SEFC 170 LLC / DONNA G GRAHAM
AH1900051 / CONSTRUCTION
WR #3566756 - M.ALLEN / BRUNO - 201 TINGEY ST SE - PEPCO CREWS WILL BE INSTALLING NETWORK TRANSFORMERS AND INSTALLING CABLES - PEPCO WILL HAVE TO SHUT DOWN 3RD ST BETWEEN WATER ST & TINGEY ST SE TO SET TRANSFORMERS ONLY - WORK WILL BEGIN 10 / 12 / 18 THROUGH 11 / 30 / 18 - MONDAY THRU FRIDAYS FROM 10PM TIL 8AM AND SATURDAYS AND SUNDAYS FROM 6AM TIL 6PM
227 TINGEY ST SE   
10/09/18 
FOREST CITY WASHINGTON / DFM DEVELOPMENT SERVICES, LLC
AH1900056 / CONSTRUCTION
Yards Parcel L-2. Afterhours permit for follow-up test run of the precast concrete façade panel installation. Work to take place 7pm on 10 / 10 to 7am on 10 / 11.
   
10/15/18 
GONE YARD HOTEL OWNER LLC / MICHAEL ERIC CAMPBELL 703-631-2711
FB1900011 / SUPPLEMENTAL
NO. TO BE INSTALLED (2) GROSS RATING: 999999 BTU / HR NATURAL GAS STEAM PRESSURE 160 PSI OUTPUT: 960,000 BTU / HR
   
10/15/18 
GONE YARD HOTEL OWNER LLC / MICHAEL ERIC CAMPBELL
UP1900012 / SUPPLEMENTAL
   
10/17/18 
UNITED STATES OF AMERICA / DFM DEVELOPMENT SERVICES, LLC
AH1900079 / CONSTRUCTION
Yards Parcel L-2. Afterhours permit for the purpose of installing precast concrete façade panels. Work to take place 7PM to 7AM, 10 / 22 through 11 / 3.
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
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)
Capper Seniors 1 ('06)
Capitol Hill Tower ('06)
Courtyard/Marriott ('06)
Marine Barracks ('04)


Overviews
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M Street
South Capitol Street
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Lower 8th Street
East M Street
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