Since January, 2003
            
 Sliding from Before to After

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)
   
 
 More About Onyx

JDLand.com Home

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.

Add a Comment:

Comments are closed for this post.

JDLand Comments RSS Feed


 More News


See All Current News Items | Full Blog Archive

 
 Recent Posts

Jscott280 on Albi Opening This: Fences up around parcel H. They are going to change the ingress points to N plac...
jdc on Albi Opening This: At 37 L, windows are going in and tower crane is gone. At Chiller site next door...
dcgent on Albi Opening This: UrbanTurf looks at what's coming housing wise for the area https://dc.urbanturf....
Shogungts on Albi Opening This: @Jason - not sure if that is the plan, but it would be nice. I went by there th...
Jason on Albi Opening This: Any news on Half Street between M and N? I've heard that it's being turned into ...
202_cyclist on Retail Roundup: When parking is further reduced, people can take metro to one of the two station...
Get JDLand Updates In Your Inbox!



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  
900 B/O 11TH ST SE   THEFT FROM AUTO
Theft (theft From Motor Vehicle)
 02/19/20
900 B/O M ST SE   BURGLARY
Burglary Two
 02/19/20
1200 B/O HALF ST SE   ROBBERY  02/18/20
UNIT B/O M ST SE   THEFT
Theft 2nd Degree (all Other Larceny)
 02/15/20
400 B/O M ST SE   ASSAULT WITH A DANGEROUS WEAPON  02/08/20
300 B/O TINGEY ST SE   THEFT
Theft 2nd Degree (all Other Larceny)
 02/02/20
700 B/O L ST SE   THEFT
Theft 2nd Degree (all Other Larceny)
 02/01/20
600 B/O VIRGINIA AVE SE   ASSAULT WITH A DANGEROUS WEAPON  01/29/20
1300 B/O 4TH ST SE   THEFT FROM AUTO
Theft (theft From Motor Vehicle)
 01/27/20
1100 B/O 8TH ST SE   BURGLARY
Burglary Two
 01/25/20
303 VIRGINIA AVE SE   ROBBERY  01/25/20

Recent Issued Building Permits Archive  
909 4TH ST SE   
02/12/20 
MEREDITH FASCETT / null
E2004655 / SUPPLEMENTAL
1300 4TH ST SE APT 214   
02/03/20 
null / NA NA NA
EHOP20983190 / HOME OCCUPATION
1021 5TH ST SE   
02/13/20 
KEVIN WILLIAMS / KEVIN WILLIAMS; KEVIN WILLIAMS
B2005053 / CONSTRUCTION
Apply for building permit to have final closing inspection for permit #B1602481 & B1602513 per inspector inspection report since these permits has expired.
150 I ST SE   
02/14/20 
SQUARE 737 LLC / JASON D DORRIS
AH2000818 / CONSTRUCTION
Construction of a new 13 story apartment building with three below grade parking levels, 1st floor retail, and amenity areas; 375 units and 181 parking spaces. To include mechanical, electrical, plumbing, elevators and structural work.
250 M ST SE   
02/14/20 
SQUARE 769 LLC / null
P2003901 / SUPPLEMENTAL
800 NEW JERSEY AVE SE   
01/30/20 
NEW JERSEY AT H LLC / MICHELLE GABBITAS
AH2000649 / CONSTRUCTION
Manhole rehabilitation on New Jersey, 2nd St and M St SE to repair 3 existing sewer manholes in DDOT ROW. Work will all be done through existing manholes (trenchless) and include lining, rebuilding and bypass of existing manholes.
861 NEW JERSEY AVE SE   
01/28/20 
DISTRICT OF COLUMBIA / JANE MCCRAY
AH2000647 / CONSTRUCTION
Pepco contractor, W.A.Chester, will be splicing cable on 02 / 01 / 2020 - 02 / 28 / 2020, from 9 PM - 7 AM.
1275 NEW JERSEY AVE SE 20003   
02/14/20 
BROOKFIELD PROPOERTIES / TIM GOOD
AH2000849 / CONSTRUCTION
After hours to conduct work on 1275 New Jersey Ave SE on the upcoming holiday, Presidents Day, February 17, 2020. Operations would include below grade concrete and waterproofing activities with access limited to N Street. This permit would not include extended work hours beyond the normal 7am to 7pm period.
1275 NEW JERSEY AVE SE   
01/29/20 
US GOVERNMENT / null
E2004153 / SUPPLEMENTAL
   
01/29/20 
MILLER AND LONG / WILLIAM MOORE
AH2000659 / CONSTRUCTION
Afterhours to pour concrete with pump truck from 11pm to 7am from 2 / 6 / 2020 to 3 / 6 / 2020
   
01/30/20 
UNITED STATES OF AMERICA / VINCENT J. BROWNING; VINCENT J. BROWNING
P2003449 / SUPPLEMENTAL
1-Oil / Sand interceptor
   
01/30/20 
US GOVERNMENT / null
E2004202 / SUPPLEMENTAL
   
02/07/20 
MILLER AND LONG / WILLIAM MOORE
AH2000699 / CONSTRUCTION
Afterhours to put up towercrane with mobile crane saturday 2 / 8 / 2020 and 2 / 9 / 2020 from 5am to 1159pm
1299 NEW JERSEY AVE SE   
02/18/20 
FOREST CITY SEFC LLC / STRAUCHON; SEE BELOW
BCIV1800153 / CONSTRUCTION
Phase 1A BCIV Permit Description - BCIV 1800153 - The subject BCIV permit is for the Phase IA development of Quander St SE, N Pl SE, and 1-1 / 2 St SE within the overall Forest City, Yards West (FCYW) development area which emphasizes: pedestrian-focused public realm, optimized utility corridor, fully integrated SWM design, and complete street and vision zero design. The FCYW Phase IA is comprised...
1322 PATTERSON AVE SE   
02/13/20 
JOINT BASE ANACOSTIA BOLLING - UNITED STATES NAVAL OBSERVATORY SI / TONYA HARRIS; TONYA HARRIS; TBD
BCIV2000046 / CONSTRUCTION
***FEDERAL PROPERTY*** PROJECT WILL CONSIST OF DREDGING THE EXISTING RETENTION POND AND INSPECTING AND CLEANING THE OUTLET CONTROL STRUCTURE (S1) LOCATED ON THE UNITED STATES NAVAL OBSERVATORY TO REMOVE SEDIMENT ACCUMULATION. CONTRACTOR SHALL AVOID THE CLEARING OF VEGETATION ON POND EMBANKMENTS AND SURROUNDING AREAS SO AS TO KEEP RESTORATION AND REPLANTING TO A MINIMUM.
71 POTOMAC AVE SE   
02/13/20 
MRP REALTY / JAMES VANEGAS
AH2000681 / CONSTRUCTION
Perform interior and exterior construction activities. New construction 14-story new residential multi-family building.
   
02/19/20 
RIVERFRONT HOLDINGS II, LLC / JUSTIN BISHOP; JUSTIN BISHOP
SP1900054 / CONSTRUCTION
Construct a 680 sqft concrete swimming pool inside an existing waterproofed structural box on the 14th floor. All MEP, decking and fencing work by other trades under separate permits.
227 TINGEY ST SE   
02/12/20 
GONE YARD HOTEL OWNER LLC / BOB BIROONAK; BOB BIROONAK
SG2000048 / CONSTRUCTION
one double face illuminated blade sign
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
Thompson Hotel ('20)
West Half ('19)
Novel South Capitol ('19)
Yards/Guild Apts. ('19)
Capper/The Harlow ('19)
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)
Capper Seniors 1 ('06)
Capitol Hill Tower ('06)
Courtyard/Marriott ('06)
Marine Barracks ('04)


Overviews
Capper/Carrollsburg
Anacostia Riverwalk
New Jersey Avenue
M Street
South Capitol Street
The Yards
Lower 8th Street
East M Street
Boathouse Row





                  © Copyright 2020 JD.