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32 Blog Posts Since 2003
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This was referenced in the flurry of stories on the company a few weeks ago, but Monument Realty has now officially announced that they have signed a 10-year 50,000-square-foot lease with the Federal Aviation Administration at 55 M Street, the building on top of the Navy Yard Metro station just north of Nationals Park. With this lease, DDOT's 150,000-square-foot lease signed last fall, and two other smaller tenants, the 275,000-square-foot building is now 85 percent leased, with only three smaller office suites remaining (as well as all of the building's ground-floor retail space).
The press release says that the FAA is expected to move into their new spaces on the 8th and 9th floors in April, and that DDOT is expected to complete its move to the fourth through seventh floors during the second quarter of the year.
As for the rest of the Monument Half Street project, which as designed includes a 200-room hotel and 332 residential units and plenty of ground-floor retail to the south of 55 M, the press release quotes executive vice president Douglas Olson as saying that they are"actively working to move forward with Monument's next phase of Half Street."
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More posts: 55 M St., Development News, Monument/Half St., officespace
 

I keep saying I'm never going to take any more photos of politicians at microphones, but who can resist them slinging sledgehammers? This morning there was a brief ceremony officially kicking off the redevelopment of 225 Virginia Avenue, turning what was the old Washington Star building and then Washington Post printing plant into 200 I, a 320,000-square-foot LEED Gold office building housing three city agencies. Here's a slew of photos, not only of the ceremony but also a few images from inside the building, as well as two renderings of what the lobby will look like when it's completed.
Though the sun was out, the assembled guests (and gate-crashers!) probably wished this little shindig had been held yesterday, when it was about 25 degrees warmer. But at least it made for a quick event, which didn't seem to bother anyone too much.
The renovation is expected to be complete and tenants moved in by the second quarter of 2012. The Office of the Chief Technology Officer, the DC Commission on the Arts and Humanities, and the Child and Family Services Agency will all be occupying the building, and there may also be some "incubator retail space" on the ground floor's southwest corner. There will also be an art gallery in the new lobby that will open out onto I Street and Canal Park, showcasing works from the Arts and Humanities commission's collection. There will also be 180ish parking spaces on site, some in the building's basement but about 100 of them in a two-level parking deck on the 3rd Street side of the building (where the current surface lot is). And the loading dock will now be just west of 3rd, on Virginia.
The building was bought by the city for $85 million in 2009, and then leased it to StonebridgeCarras in a 20-year lease/leaseback agreement to fund the construction. You can check out my 225 Virginia project page for lots (and lots!) of background on this building, though the page isn't quite up-to-date with today's stuff. Yet.
 

Both the Washington Post and the Washington Business Journal (subscribers only) came out with stories this week chronicling the rise and fall and now re-rise of Monument Realty. They both describe Monument's high-flying ways during the real estate bubble of the early 2000s with "high-risk, high-return deals and an aggressive, cowboylike approach to development that rubbed the old guard the wrong way," followed by their near dissolution thanks to the collapse of their backer, Lehman Brothers. But thanks to some new deals around the region with different financing partners, Monument appears to be rebounding.
There's not been an announcement from Monument that I've seen, but the WBJ article says that Monument has signed the Federal Aviation Administration to a 55,000-square-foot lease at 55 M Street, which I believe would bring the building to about 90 percent leased. (At the time Monument announced their deal to lease 150,000 square feet to DDOT, they said the 275,000-square-foot building's office space was 70 percent leased.)
However, in detailing what it says are $500 million in new Monument projects around the Metro area leveraged from a $10 million deal with Atlas Capital Group, WBJ makes no mention of any intentions for construction to get underway on Monument's remaining Half Street plans just north of Nationals Park. The well-known hole in the ground, dug in 2007 when 55 M was built, is eventually supposed to be 330 residential units and a 200-room hotel, which you can see a rendering of on my project page or on Monument's Half Street web site. Monument also owns all of the land on the east side of South Capitol between M and N except for the self storage building, as well as the 50 M street lot on the northeast corner of Half and M.
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More posts: 55 M St., Development News, Monument/Half St., officespace
 

On the heels of Monday's news of a new tenant for 20 M St., SE, Lerner Enterprises has just announced another 20,000-square-foot lease, bringing the building to 97-percent occupancy. This tenant is Systems Planning and Analysis (SPA), which will be occupying the 8th floor. They are expected to move in this spring, and will join the Bureau of Land Management, Booz Allen Hamilton, and the Columbia Group as the building's office tenants; Wachovia Bank at this point is the building's only retail tenant. 20 M was completed in March 2007.
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More posts: 20 M, Development News, officespace
 

Lerner Enterprises has just passed along the news that The Columbia Group has signed a lease for 20,039 square feet at 20 M St., SE, bringing the building to about 84 percent leased. The company--which does "technical services support" for the US military--is expected to move in this spring, and will be occupying space on the 7th floor. The other tenants--the Bureau of Land Management and Booz Allen Hamilton--are expected to start moving in in January.
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More posts: 20 M, Development News, officespace
 

From Monday's WaPo Capital Business: "Real estate developers and brokers in Southeast Washington say that Kaplan has been looking for office space suitable for the opening of a law school near the Washington Nationals' baseball stadium.
"Speaking on condition of anonymity because they are not authorized by Kaplan to discuss the company's plans, the sources say Kaplan hired the real estate brokerage firm Jones Lang LaSalle and has been seeking up to 130,000 square feet in the Capitol Riverfront Business Improvement District, around the Nationals' park, so it can open a law school there in 2013."
There's not much additional meat in the story, other than saying that Akridge (which owns the Half Street block northwest of the ballpark) is one of the developers vying for Kaplan's attentions. There's certainly a number of planned office buildings that could accommodate 130,000 square feet, and maybe the credit markets have shaken out enough that a lease taking 50 percent-ish of a building would be enough to get a construction loan. But there's also the issue of whether some proposed federal aid rules might hamper Kaplan's plans for expansion. [Full disclosure: Kaplan is owned by the Washington Post Co., my corporate overlords in my non-JDLand real life.]
We shall see....
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More posts: Capitol Riverfront BID, Development News, kaplan, officespace
 

I wasn't able to attend* today's foreclosure sale of 100 M Street, but word filtered to me early this afternoon that the 220,000-square-foot office building was picked up for a cool $57 million by Northwood Investors, a real estate investment management firm based in New York City. I've been told (and I'm trying to confirm) that Northwood had bought the original loan/note from Bank of America, and then had the high bid today against one other bidder, whose identity I don't know.
This appears to be Northwood's first foray into the DC market, and the rumor is that they plan to hold 100 M and get it leased up. Perhaps the DC biz media will have more on this sale in coming days....
As I wrote about previously, this sale was for the building itself and not the land, since 100 M's developers (Opus East) never bought the land and instead paid rent to the owners. You can read more about the building's history here; it opened in late 2008 and is currently about 43 percent leased.
[*My exile from blogging is coming to an end soon, I promise--though there really hasn't been much going on this week that I feel like I've missed completely, since I have managed to tweet from time to time.]
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More posts: 100 M, Development News, officespace, Square 743N
 

While normal people have spent their weekend recreating and taking it easy, I've been trying to find out more about the just-announced foreclosure sale of 100 M, the 220,000-square-foot office building that has been tied up in Opus East's Chapter 7 liquidation.
My big question was about why this is being billed as a sale of a "60-Year Leasehold Interest," and what I've found out is that Opus never owned the land, but instead had entered into a lease with and paid rent to the landowners. (Who are the people behind "Square 743 Inc"? I'd love for someone to tell me!) When Opus's operations went south, their lender (Bank of America) stopped funding the construction loan, so contractors stopped being paid, liens were filed, bankruptcy case got ugly, etc. etc.; basically, it's been a mess.
BoA is now washing its hands of it all, and is looking to get back some amount of the $58 million currently owed on the construction loan. (The land ownership is not being foreclosed on.) I've heard that BoA contracted with CB Richard Ellis earlier this year to sell the loan, and there's speculation that BoA may have a deal with an investor already, even though the Notice of Foreclosure Sale still lists BoA as the holder of the note. This would be similar to the way JPI's empty lot at 23 I Street changed hands a year ago, with SunTrust Bank selling the note to Ruben Companies, who then instituted foreclosure proceedings and took ownership of the property when no bidders came forward.
However, while the word "foreclosure" usually conjures up feelings of doom and gloom, for 100 M this should be a step up from Opus's liquidation. Instead of continuing to be tied up with companies and lenders and courts who have no interest or wherewithal to spend the money needed to clean up the mess and to market and lease the building's office and retail spaces, there may now be at least one investor--and maybe others, if the foreclosure sale brings bidders--who feels that the building is worth taking a gamble on now for a return on investment later. (Though it's worth noting that there is not a similar feeling of optimism about any new office projects in the area any time soon, with on-spec construction still completely DOA.)
We shall see how it all shakes out.
The auction is scheduled for Oct. 28 at noon, so this building can be yours for a mere $5 million deposit and an all-cash winning bid. It's currently 43 percent leased.
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More posts: 100 M, Development News, officespace, Square 743N
 

[Great--big news at 5 pm on Friday. Hope somebody actually reads this] On Sept. 21, a notice of foreclosure sale was filed for 100 M Street SE, the 220,000-square-foot office building built by Opus East and completed in late 2008. A few months later, Opus became the biggest Near Southeast casualty of the recession, filing for Chapter 7 liquidation and leaving their 440,000-square-foot office project at 1015 Half St. unfinished. While 1015 Half was soon picked up by the Douglas Wilson Companies and is now being completed, 100 M has remained at sea, despite a rumor a year ago (quickly shot down) that Mayfield Gentry was buying it for $80 million.
The 100 M auction is scheduled for Oct. 28 at noon; I admit to being pretty clueless on foreclosures and auctions and CRE minutiae, so I don't know if the fact that it is technically an auction of a "60-Year Leasehold Interest" in the building has any significance to us lay folks. I imagine the business press will have more on this story.
According to the auctioneers, 100 M is currently 43 percent leased.
(And, by the way, the blue sky in the above image is not faked. I've never ever seen as electric blue a sky as I did the morning I took that photo.)
[hat tip to reader J]
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More posts: 100 M, Development News, officespace
 

A release went out on the wires today announcing that Corporate Office Properties Trust has spent $119 million, including the assumption of a $70.1 million mortgage, to buy Maritime Plaza, the 12-acre site at 12th and M, SE.
This is the third time the site has changed hands since construction on the second office building was completed in 2003, with Bernstein Cos. selling it for $92 million in 2004, and then Brickman Associates reportedly paying $115 million in October of 2005. The site, which has two completed office buildings with 100 percent occupancy, has included plans for two additional 175,000-square-foot office buildings and a 250-room hotel; leasing is handled by Lincoln Property Company. The land beneath the buildings and plans, however, continues to be owned by Washington Gas, as it has been since pretty much the dawn of time.
[The rumors of this sale were reported back in early August, and I'm exhausted from three days of dealing with computer issues after my one-year-old machine up and croaked, forcing me to buy a new box, so apologies for basically just pasting-and-editing my previous entry. I figure no one read it anyway. :-) ]
 

While wandering around the web site for the city's Department of Real Estate Services, I found out that the deadline has been extended until noon tomorrow for the request for offers to lease data center space at the revamped 225 Virginia Avenue (aka the old Star/Post Plant). They've also posted a Q&A about the RFO that may or may not hold any nuggets of interest.
But what broke my heart is the last sentence of a press release from mid-July touting the financing deal that's allowing construction to begin on the project late this year:
"In related news, the address for 225 Virginia Avenue, SE will change. The new address will be 200 I Street, SE."
Waaaaaaahhhhh! It will always be 225 Virginia to me!
But, looking at the rendering of the redesign, it appears that they're moving the main entrance to the south side of the building, facing Canal Park, hence the I Street designation.
 

Multiple anonymous sources are allowing CityBiz Real Estate to report: "Corporate Office Properties Trust is awaiting lender approval on a $120 million acquisition of Maritime Plaza, a 12-acre site located at the East End of the Washington, D.C. Naval Yard, multiple sources tell citybiz real estate." This follows a story earlier today saying that COPT was close to purchasing an unnamed site, described only as being a fully leased location occupied primarily by defense contractors.
If this goes through, it would be the third time the site has changed hands since construction on the second office building was completed in 2003, with Bernstein Cos. selling it for $92 million in 2004, and then Brickman Associates reportedly paying $115 million in October of 2005. The site, which has two completed office buildings, has included plans for two additional 175,000-square-foot office buildings and a 250-room hotel; leasing is handled by Lincoln Property Company. The land beneath the buildings and plans, however, continues to be owned by Washington Gas, as it has been since pretty much the dawn of time.
 

WBJ updates its story from a few months ago to basically say, yes, DDOT is still planning to move to 55 M Street, Monument Realty's building on top of the west entrance of the Navy Yard station. The city council has until close of business today (Wednesday) to decide if it wants to hold up the plans, and apparently the council's budget office is taking a close look at the lease, since it will cost DDOT about $6.9 million per year over 10 years to consolidate all of its workers in Near Southeast, compared to the $3.1 million it's paying now to lease space in multiple buildings.
With USDOT just two blocks to the east, M Street SE would turn into Transportation Row if DDOT does indeed come to 55 M.
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More posts: 55 M St., Development News, Monument/Half St., officespace
 

The city's Department of Real Estate Services (formerly OPM) has put out a solicitation to sublease 50,750 square feet of below-grade space at 225 Virginia Avenue as a data center. While that may be terribly interesting to some people, probably the item of greater interest is the rendering on the first page, which is the first glimpse of the "reskinned" building, showing the current gray windowless monolith rebuilt into a more open structure that actually resembles an office building. The rendering is from the building's southwest corner, so the SE Freeway (not shown) would run "behind" the building. You can just barely see Capitol Quarter townhouses at far right, making that Third Street.
The solicitation also says that construction is expected to begin in November of this year and last 15 months, with development being handled by StonebridgeCarras while the city continues to own the land. When completed, three city agencies will occupy the building--the Commission on Arts and Humanities, the Office of the Chief Technology Officer [hence the data center stuff], and the Child and Family Services Agency. If you see people wandering around the site on Tuesday, it's a site tour for parties interested in the data center colocation. Responses to the solicitation are due to the city on July 30.
If you're just joining the story now, feel free to read my past 225 Virginia posts to catch up on the many twists and turns this building has seen over the past few years. (h/t DCMud)
 

Oh, I've wanted to post this rumor for so long (and have hinted at it on Twitter) but never could bring myself to pull the trigger when I couldn't get anything out of Monument or DDOT or any first-level source. But, here's WBJ going where I wouldn't (subscribers only): "[The District Department of Transportation] has signed a letter of intent and is close to a deal on a 10-year lease for 150,000 square feet in Monument Realty's Half Street building at 55 M St. SE, according to sources." Neither Monument nor DDOT would confirm to WBJ either, with DDOT spokesman John LIsle quoted as saying, "We are hoping to move this year. It may be ambitious, but that is our goal."
Originally DDOT was going to move to the Anacostia Gateway project, but that was cancelled a few months ago. WBJ says that, between DDOT's space and existing tenant Sayres and Associates (who apparently will be adding another 10,000 square feet to their lease), 55 M will be about two-thirds leased.
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More posts: 55 M St., Development News, Monument/Half St., officespace
 

Thanks to one of the National Capital Planning Commission's fabulous documents, we're starting to get first hints of plans by the Cohen Companies for what they are describing as a three-building, 815,000-square-foot office, hotel, retail project on the very eastern end of M Street, nestled between Boathouse Row and the CSX tracks east of Maritime Plaza. It's so early in the process that it's not even on Cohen's New Projects page, but City Paper's Housing Complex blog has learned that the company will be putting together a planned unit development application to the Zoning Commission "over the next six to nine months." (No financing is lined up, though, so don't look for digging to start anytime soon.) See the NCPC document for some early drawings and some basic information on how they envision the offerings of the three buildings.
(Cohen Companies, by the way, is the developer of Velocity.)
Back in 2003-ish, there were plans for this site to be a townhouse development (see page 15), but those never got off the ground partly because of zoning issues, which then begat an attempted rezoning of the area in 2004 that failed. But rezoning of the site will have to be back in the forefront when this project's PUD application hits the zoning committee, since the space is still zoned "M" (industrial).
The project is in front of NCPC because of Cohen's request to close "paper street" segments of Virginia Avenue, M, and 14th streets. This is a part of a settlement between 1333 M Street, SE, LLC and the city from a lawsuit over waterfront development in South*west*, where the Cohen Companies are agreeing to release their claims in exchange for three small pieces of government land at 1333 M SE as well as the city's support in requesting the street closures. (The street closures themselves have been approved by the city council as bill B18-0572, and are expected to become law later this month.)
The NCPC is objecting to the street closures; and thankfully Greater Greater Washington has been writing in detail on the case, so I'm just going to throw it over to them for all the nitty gritty, because it's way out of my league. (Read also this GGW entry about connecting this area to the neighborhoods to its north if/when the remnants of the freeway to Barney Circle are removed.) But, again, the NCPC staff recommendation report is also a great read for not only the NCPC's concerns but also for the history of the area under review and other details. The NCPC board is meeting this afternoon, and we'll see what comes out of the session (I assume GGW will be hot on the trail).
If you've never ventured down that way, my East M page has a few not-particularly-current photos of the location (I don't get there very often myself), along with more images of Boathouse Row. When the project begins to wind its way through the zoning process, I'll get more on the ball. The city's 2009 Boathouse Row Planning Study is also a good spot to learn more about the area.
UPDATE: Thanks to commenter Evan, I'm reminded that I should have included the additional information that, because this is part of the old Washington Gas (and I think Steuart Petroleum) site, there are some serious remediation issues to be addressed, which are mentioned both by Ron Cohen on page 25 of this 2003 ZC transcript and on page 19 of this 2004 ZC transcript (saying that the contaminated soil is 11 feet down). Remediation is also mentioned in the 2009 Boathouse Row Planning Study and in this EPA document (under "Washington Gas and Light"). Oh, and the EPA's 1999 record of decision on what cleanup remedies would be needed. It should be noted that both Maritime Plaza buildings were completed after this document. (This is all before my time, so I'm researching on the fly.)
UPDATE II: Here's a WBJ article (subscribers only for 7 days) on the NCPC angle; it also reminds that, outside the monumental core of the city, NCPC's rulings are purely advisory.
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More posts: 1333m, Development News, East of 11th Street, officespace, zoning
 

We went through this back in early March, when sharp-eyed JDLand readers passed along indications of work re-starting at the stalled 1015 Half Street office building project, with a Skanska sign going up at the skeleton. But it disappeared soon afterward, along with the workers that had briefly materialized. But last Tuesday, faithful Tweeters again reported signs of life at the work site, and now WBJ is reporting that Skanska USA Building is indeed about to re-start construction, expecting to finish the 440,000-sq-ft office and retail project by the end of the year.
This building, on the site of the old Nation nightclub, was first started in late 2007 before the collapse of developer Opus East ground work to a halt in May 2009. (These photos show the timeline pretty well!) The Douglas Wilson Companies was named receiver a few months later, and originally announced that work would re-commence in October of last year, but nothing has happened until now.
No tenants have been announced. See my 1015 Half page for more details on the long and winding road this project has taken.
UPDATE: Here's the press release from DWC announcing the restart.
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More posts: 1015 Half, Development News, officespace, square 697
 

Some alert readers reported today via e-mail and Twitter that there is renewed activity at the site of 1015 Half Street, where construction of the 440,000-sq-ft office building was halted in the middle of 2009 when owner Opus East went bust and liquidated. (The Douglas Wilson Companies was named receiver for the property in August.) I've heard no official announcements, but the many liens against the property were settled in January, and apparently people are on-site, and a new fence and "Skanska" sign are now up at Half and L, so we'll see if the project is in fact moving again.
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More posts: 1015 Half, Development News, officespace, square 697
 

I'm hearing that the Douglas Wilson Companies--a San Diego developer specializing in "distressed properties and crisis management" that was appointed in late July as receiver for both 1015 Half Street and 100 M--is getting construction moving again at 1015 Half (along with "aggressively" marketing and leasing of the building). Also, a "disposition strategy" for 100 M is expected to be in place later this month. This appears to be Wilson's first foray into the DC market, though the company also has branches in Atlanta, Las Vegas, Miami, Orlando, and San Francisco. This San Diego Business Journal profile of Wilson and his company gives a bit more info not only on the organization but on the role of a receiver in dealing with distressed properties. The two buildings hit the skids when Opus East collapsed and liquidated.
UPDATE: Here's the press release.
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More posts: 100 M, 1015 Half, Development News, officespace, square 697
 

Opus East, the development company whose portfolio includes the already completed 100 M and under construction 1015 Half office buildings, filed on Wednesday for Chapter 7 liquidation, according to the Washington Business Journal. The article mentions the falling through of Opus's deal to sell 100 M to MayfieldGentry Realty Advisors earlier this year as part of the company's woes, and the building is part of the bankruptcy filing and liquidation. The 1015 Half Street project, expected to finish late this year or early next year, is presumably part of it as well. No tenants for the 440,000-sq-ft office building have been announced.
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More posts: 100 M, 1015 Half, Development News, officespace, Square 743N, square 697
 
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