Friday, June 30, 2006

Petworth Project Gets Nod

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A Washington DC Council committee this week gave an approval to a project in the 4100 block of Georgia Avenue by allowing closure of the alley between Georgia Ave., Kansas Ave., and Taylor St. The local ANC has already given its approval for the Neighborhood Development Corp (NDC) to construct a mixed-use rental development just north of the Petworth Metro, expected to contain 72 affordable apartments, with construction to start this Fall (artist's rendering of building is pictured). Included will be 10,500 square feet of retail and 57 underground parking spaces. The Petworth construction boom comes as nearby condo projects Park Place (completion in 2008) prepares to start sales shortly, and as Georgia Avenue readies for a new rapid transit bus running from Silver Spring to the National Archives. The novel rapid transit will operate new 40- foot buses beginning the end of September, reducing the number of stops from 54 to 14, and will be equipped with an emitter that lengthens the timing of green lights to allow the bus to pass through.

Sold Out! Now Selling, Please....

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Envy the marketers that sold 100-unit condo projects almost overnight, able to walk away with quick profits...and then start over. While many condo projects sold out quickly during the boom, the changing market has led many hesitant or remorseful buyers to renege, leaving developers to remarket the property post-marketing blitz and sales centers. The Crescent in Silver Spring saw 11 of its 143 units come back on the market when buyers became wary of the condo market, and Jenkins Row on Capitol Hill saw numerous contracts rescinded as sales slowed in 2005. Often foregoing their 5% security deposit and security for upgrades, anxious buyers sometimes see breaking their contract as less costly than paying taxes and closing costs on units that may have declined in value, and in some cases have purchased in another building where better incentives justify losing $20,000 or $30,000. The Rhapsody on Florida Avenue (pictured), sold out last Summer and now fully built, is offering units that failed to close, and now has to compete with several nearby projects offering incentives and the opportunity to select builders’ options. While having a defaulting buyer is not new, several developers say the rate has risen as home buyers now have more opportunities and the market and time to shop.

DC Passes Rent Control Reform

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DC Mayor Williams signed into law on Tuesday a revised rent control law, updating one of the more arcane systems of rent control in the nation. The law caps rent increases for covered properties at 2% plus CPI for occupied units and up to 5% for elderly and disabled tenants; rent increases for vacant units will be capped at 10% or to the price of a "substantially identical rental unit," not to exceed a 30% rise. The new system abolishes the complicated rent ceiling / rent ceiling adjustment factor that left many landlords and tenants unsure of the permissible rent. Councilmember Jim Graham, who sponsored the bill, estimated that the change will affect 100,000 apartments in the city. Bill 16-109, which goes into effect in 30 days, limits rent increases to once per year. View the full text of the bill.

Thursday, June 29, 2006

Interest Rate Hits Five-Year High

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On Thursday, the Federal Reserve raised the federal funds rate (the interest that banks charge each other) by a quarter-point to 5.25 percent, the highest level in more than five years. This rate raise, the 17th consecutive increase, was done in order to help "limit inflations pressures," according to a statement released by the Fed. Only two years ago, the fund rate stood at a 46-year low of 1 percent. Banks responded to the Fed increase by quickly raising the prime rate (to which most consumer lending is tied) to 8.25 percent, the highest since 2001. Before the Fed’s move Thursday, the average rate on a 30-year mortgage was 6.78 percent.

Tuesday, June 27, 2006

All Aboard! Woodbridge to See Building Boom

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According to the Washington Business Journal, the Woodbridge area of Prince William County (home of Potomac Mills Mall) is about to experience a building boom in an effort to capitalize on its Virginia Railway Express (VRE) transit stop. The Hazel Land Companies, Inc., is backing the creation of Rippon Center, a high-end $200 million project next to the VRE’s Rippon Station that will feature 550 high-rise condominiums, 250,000 sf of office space, and 27,000 sf of retail, as well as a 300-space parking deck. Justifying the project, Bob Wulff, executive vice president of Hazel, told the Journal that "[t]his property is walking distance to the train station, and in an era where traffic is only getting worse, it's a terrific asset. You can get to Downtown D.C. in 35 minutes." Hazel has already developed a 734-unit community next to this land at Riverside Station. Prince William County planning officials have already approved Rippon Center's rezoning application, and if the Board of Supervisors also approves it this summer, construction would start in 2008.

Friday, June 23, 2006

Clarendon Center Project Gets Approved

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Last week, the Arlington County Board gave its official approval to the Clarendon Center plan, calling it "one of the most significant site plans ever approved in Arlington." The proposed Clarendon Center will be bounded by Wilson Boulevard, North Highland Street, 11th Street North and North Garfield Street, and will contain new office space, ground-floor retail, and a residential tower. While featuring major redevelopment, the project will preserve two historic structures – The Underwood (built in 1939) and the Old Dominion buildings (1941). Specifically, next to the Underwood will be built a 97,860 square-foot, six story office building, and 15,725 square feet of new ground floor retail space. Meanwhile, the Old Dominion building will anchor two new towers – one a 244-unit, twelve-story residential tower and the other a nine-story, 84,395 square-foot office tower, plus 38,333 square feet of new ground floor retail. Both development areas will be separated by a landscaped courtyard. The developer, Saul Centers, Inc., expects to break ground late this year on Phase I (the Old Dominion site), with a completion date of early 2009. Phase II (the Underwood site) is expected to break ground in late 2008 or early 2009, with a completion date of 2010.

Thursday, June 22, 2006

King Farm Condo Conversion Opens for Sale

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Sales begin this weekend for the Royalton, the newest condo development at King Farm in Rockville. The townhouse community was built over the last six years at the intersection of I-270 and I-370. Located 2 blocks from the Shady Grove Metro, the condos-to-be were built in 2004 as part of the 1100-plus rental apartments within the planned neighborhood until Chicago-based developer Monaco purchased 317 of the apartments for conversion, reportedly for $112m. Each unit will be renovated as it is purchased; condos will start at $253,900.

Georgetown Waterfront Park Finally Moves Forward

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With all the recent excitement over plans to redevelop the Southwest and Anacostia waterfronts, it’s been easy to forget the lack of activity surrounding the long-on-the-board plans for the Georgetown waterfront. However, this is about to change, as work is now starting on the $15 million Georgetown Waterfront Park, which is to occupy 10 acres between Washington Harbour and the Key Bridge. When completed by the end of 2007, the park will include pathways, a new promenade to integrate the shore line from Key Bridge to Washington Harbour and the Kennedy Center, gardens, a bike path connecting the Rock Creek Trail to the Capital Crescent Trail, and “environmentally sound bio-edge spaces that preserve native plants and enhance water quality” … guess we’ll see what that means in 18 months.

Tuesday, June 20, 2006

Build It and They Will Come...and Park

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A major piece of the new Washington Nationals stadium puzzle slowly moved into place this week, as DC Mayor Anthony Williams confirmed Tuesday that plans are in development to build a mix of both above and underground parking next to the ballpark. The parking structure will be part of a stadium complex that will also contain retail stores and 660 new condominium units (140 units will be priced below market value for lower-income residents). Also expected for this development is the arrival of a 180-room boutique hotel at the corner of 1st and N Street SE, with early word indicating it could be a local outpost of the New York-based W Hotel chain. The parking plans – which call for 900 spaces on one level below ground, and another 925 spaces spread above two new structures in the complex (which will contain the condos and retail outlets) - are the end result of negotiations between developers, the city, and new Nationals ownership. Whether this plan provides enough parking for both the opening of the stadium in April 2008 as well as for the condo dwellers and visitors to the entertainment area is now up for debate....

Friday, June 16, 2006

Monument Backs out of Condo Development

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Monument Realty has announced it is cancelling its planned conversion of the 571 unit Park Center condos in Alexandria's West End. The three apartment towers, dating from the mid-1970's, were purchased by Monument for the purpose of conversion into condominiums and were undergoing renovation. No settlements have occurred on the individual condos, which a spokesman said is currently about 50% occupied by tenants. Only about 60 contracts were written on the property since sales began in June of last year. Monument will retain the property for now and rent the remaining units; purchasers are being offered their security deposits back, with interest. Monument is currently in the processing of converting the famed Watergate Hotel into 96 coops, and owns approximately 12 acres of non-contiguous land in the vicinity of the soon-to-be stadium, including 3.5 acres adjacent to the stadium on Half St. Monument is currently selling condos at the Chase, a condo conversion in downtown Bethesda, the Palatine and the Prime, both highrises in Arlington, and at Potomac Place in Southwest DC.

Former Embassy in Dupont Goes Condo at Last

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Burgess Properties began sales this week of the former Taiwanese Embassy as the Duncan Condominium. The building, at the corner of 18th & R Street in the center of Dupont Circle, was built in 1900. The development received zoning variances in February 2004 and first advertised condo sales in late 2004, but development issues slowed the project. Sales never commenced, and the building has since remained vacant and visibly deteriorated. Prices for the 9 condos will range from $780,000 for a 1 bed, 1 and a half bath condo, to $1.8m; condos are expected to be completed by this Fall.

Thursday, June 15, 2006

DC Waterfront Redevelopment Sails Forward – Five Developers Contend for Project

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The Washington Business Journal is reporting that on June 13, the Anacostia Waterfront Corporation (AWC) trimmed its initial list of 17 developers vying for the right to redevelop the 47-acre Southwest waterfront to just five teams. Four of the teams are led by Washington-area developers, with the last team hailing from Chicago. The teams are: EastBanc-LNR Waterfront Partners; Madison Marquette and KSI Services and Waterfront Partners; SW Waterfront LLC (headed by JBG); PN Hoffman and Struever Brothers Eccles & Rouse; and the John Buck Co. of Chicago. The five teams were selected for their experience with public/private large-scale, mixed-use projects. The AWC expects to select a final team by the end of this summer to fulfill its dream of a gleaming new $500 million waterfront full of "maritime-themed" housing and retail. Considering how the Southwest waterfront is now blocked by rows of big-boxed restaurants of middling quality, the AWC plan is a welcome development that will embrace DC’s impressive waterfront.

Wednesday, June 14, 2006

Where Have All The Good Bars Gone?

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Those of us of a certain vintage (let’s stick with “old enough to know better”) can recall spending hazy nights at such bygone watering holes such as the old Crow Bar and 15 minute club downtown off eerily quiet K Street, or the Insect Club and dc space in once-desolate Penn Quarter – spaces now sporting sleek new office buildings or a Starbucks. Well, the next generation may soon be boring its young-‘uns with tales of long-forgotten bars such as Carpool and Dr. Dremo’s where new condos now stand, if current development plans come to fruition.

First on the block is Carpool, on Fairfax Drive in Arlington. Donohoe Development plans on replacing the billiards and beer hall with a 232,500 sf mixed-use development of 188 condominiums and retail outlets, with completion sometime in 2008. This isn’t your typical “small guy driven out by developers” story, though - Carpool actually owned its building, and sold the land to Donohue with new projects and locations in mind.

As for Dr. Dremo’s (like Carpool, a former auto showroom), the stretch of prime Wilson Boulevard real estate it resides on is slated to become a mixed-use development called 2000 Wilson, with 174 condo units and retail. If the settlement on the property goes through, the developer, Elm Street Development, hopes to begin work later this year.

Tuesday, June 13, 2006

More Changes Coming to H Street

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Previous reports on the redevelopment of H Street NE have usually focused on the western Union Station side (The Senate Square / Landmark Lofts condo project at 3rd and H Street) and the eastern end (Joe Englert's entertainment district and the Atlas Theater), but never the sandwiched middle portion of the block. This will soon, change, as the Washington Business Journal is reporting that Washington Real Estate Partners is planning on turning the 600 block of H Street into a 312,000-square-foot residential, retail and office project valued at nearly $150 million. According to documents filed with the DC Board of Zoning Adjustments, Washington Real Estate Partners is hoping to develop an existing 200,000 SF office building into 234 residential units, with 500 parking spaces and ground-floor retail, with the resulting building being nine stories in some parts (which is sure to stir up those hoping to keep the smaller scale of H Street intact).

Monday, June 12, 2006

The Condo Gods Giveth, and Taketh Away

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It might be tempting to analyze recent developments in the Rosslyn/Arlington condo market and make broad pronouncements on "The State Of The Market," but we’ll leave such baseless articles to the Washington Post. We’ll just go with, "You win some, you lose some." Early this week, a planned grand opening for 1325 Pierce was canceled by the Dittmar Company, and instead the company has decided to move forward with the building now being apartment rentals. Originally, these 19 units, which feature 2 or 3 bedrooms and balconies, were to start selling in the $600s, but they are now being listed for rent starting from $2350/month. When contacted, a Dittmar representative confirmed the "reverse conversion" to rentals, asserting it was done to take advantage of the "strong rental market for 2 and 3 bedroom units." However, all is not lost, as just around the corner from 1325 Pierce near Ft. Myer is a new upscale condo project named Scene Cityhomes by Centex Homes. These units are expected to include secured parking, gas fireplaces, walk out balconies, stainless steel appliances, etc. - not to mention interior "translucent walls" for those always wishing they had x-ray vision. Units will range in size from 900 sf to 2900 sf, and prices are expected to start from the mid-$400's for 1BR/BA to $1million for the penthouse 2BR/2.5BA. Delivery will be in 2008.

DC’s Downtown Parking Lots Disappear

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So much for easy parking downtown. For those who prefer surface parking over the subterranean alternative, downtown DC just got more difficult as the last of the surface parking lots is developed into office space. The latest lot to go was at E St. between 8th and 9th Streets, adjacent to the Hotel Monaco. In its place will rise a joint venture by Boston Properties and KEG 1 Associates to produce a Class A office building with three levels of parking, two roof top decks, a fitness center and 325,000 sf of rentable office space. Construction commenced in April, with occupancy planned for October 1, 2007, on which date DLA Piper Rudnick is scheduled to become the first occupant. According to Boston Properties, 271,000 sf of office is already spoken for, and The Washington Stage Guild has leased 11,000 of the 16,000 sf of retail space. Downtown DC office space has some of the highest occupancy rates in the country, with many buildings currently above 95 percent occupancy.

DC Housing Prices Still Rising

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According to the Office of Federal Housing Enterprise Oversight's quarterly report on national home price index, released June 1, housing prices in the District of Columbia have risen almost 21 percent in the last year, making DC the fifth fastest-growing market for housing appreciation. Maryland and Virginia are not far behind, with Maryland having a 20.47 percent increase and Virginia an 18.12 percent increase over the same period. Overall, home prices have more than doubled in DC and Maryland in the last five years. However, this growth may be slowing a bit. OFHEO Acting Director James Lockhart told the Washington Business Journal that while "[t]hese data show average housing prices still growing stronger than some may have expected, they do indicate, however, that price growth is moderating in some parts of the country, particularly in areas where prices have been rising the most." In fact, the District’s price gains have slowed somewhat, from a fourth-quarter increase of 6.2 percent to 1.5 percent in the first quarter of this year. Read the OFHEO Report at http://www.ofheo.gov/media/pdf/1q06hpi.pdf

Ballpark District Comes Alive

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In an otherwise bleak and desolate neighborhood, the first new residences near DC’s new ballpark are expected to be occupied this week. Capitol Hill Tower, the first large residential project to commence near the site of the future home of the Nationals, where nearly 2000 condominium units are currently in development, is set to settle on the first of its 334 coops this week, according to the sales office for the project. Bucking the trend of condo development, developer Valhal Corporation of New York - where coops are far more common - chose cooperative ownership, one of only 2 large projects in the DC area to go coop. CHT will offer an indoor year-round pool and fitness center. With few buildings yet completed in the area, views from any floor are likely to be impressive. For now.

Friday, June 02, 2006

New Residential Project Announced for Takoma Park

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Takoma Park is about to see one of its big circa-1960’s bland box projects undergo a transformation into the 21st century. The Hampshire Towers, located at 7333 New Hampshire Avenue, has recently been purchased by DC-based Tenacity Group and the Community Preservation and Development Corporation (CPDC) for $15.3 million. Initial plans call for the larger of the two towers to be converted into 232 condo units (sales by Tenacity), while the second building will house 218 rental units reserved for low-income tenants (management will be run by the development corporation). This preservation of one tower for rental units is a nod toward Takoma Park’s demographics and history as a rent-controlled renter refuge – while 23 percent of Montgomery County residents are renters, this number jumps to 55 percent in Takoma Park. Monarc Construction has been hired as the main contractor for this work, which is expected to begin early 2007, and will be conducted on a rolling basis.

The Green Scene – DC Proposes Building Standards

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The District Govt. this week proposed a bill "to establish a high performance building standard to encourage the planning, design, construction and operation of building projects to help to mitigate the environmental, economic and social impacts..." for projects of 20,000 square feet or more. The legislation adopts the LEED (Leadership in Energy and Environmental Design) rating system that requires a rating of each new building, with a 3 cents per square foot tax for buildings not meeting stated compliance levels, and increasing the compliance rating compliance levels on a yearly basis.

University Town Center Takes a Step Forward

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University Town Center, the aging PG plaza dating from the '60s, takes a step toward a fresher face this week with sales for its first condominium building, One Independent Plaza. The new condos will be located between the Metro 1 and Metro 3 office buildings and adjacent to the new 910-bed student housing center. The 112-unit condominium building, within walking distance to the Prince George’s Plaza Metro station, will be selling from the mid $200s The plaza, currently dominated by boxy, heavy edifices designed by Edward Durrell Stone of Kennedy Center design infamy, is expected to receive a thrust of retail and community amenities with the new construction designs. Developed by Prince George's Metro, Inc.

The DC Council Raises Property Transfer Tax

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The District Council voted this week to raise the transfer and recordation tax – paid by purchasers and sellers of property, respectively – from 1.1% to 1.45% of the sale price of commercial and residential property, for a total rate of 2.9%. The District, which currently has the highest average transfer tax of the 3 jurisdictions and considered alternatively raising the tax to 1.35% and an amendment by Councilman Barry for as much as 1.5%, will use the revenue to fund various projects, including, without apparent sense of irony, affordable housing initiatives. The legislation, which maintains the 1.1% tax on property sold for less than $400,000, is expected to be signed by the mayor.
 

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