Thursday, March 06, 2008

Industry Insight: MRP's Ryan Wade

MRP Realty has developed over 17 million square feet of land in the District of Columbia and has roughly 5 million square feet of proposed development in progress. With such volumes of development in the pipeline comes a keen and watchful eye on the market. On behalf of MRP, Ryan Wade, one of the firm's founding principals, gave DC MUD an exclusive look at the inner workings of his firm. He shared a little bit of their insight, gave us their read on the pulse of the market and talked strategy on beating out the competition when the times are a-changin'.

DC MUD: So to start off, what made you enter the real estate development business?

Wade: Good question. My family was in real estate. My father worked for Northwestern Mutual, and then actually had his own firm, so I guess I grew up in the business. And then, coming out of school (Carolina), I always knew I wanted to be in real estate. My brother is in the business and works with us. It's just a great business in DC too - it's a good social business. You can make a lot of money. But it's more than that; I think it's a good culture.

DC MUD: What about leaving Trammell Crow, how did that happen?

Wade: Crow had some of the best culture in the business, or has some of the best culture and people in the business. I had a great four years at Crow, working closely with Bob Murphy, Fred Rothmeijer who's with us, and Chris Roth who is still there. We just had a great opportunity with good partners and pretty good capital relationships. It was just a fortunate time in the market where we could actually do it and pull it off.

DC MUD: Are there differences between the way things were run over at Trammell Crow and the way you do things over here?

Wade: I think it's very similar. We have the open floor plan, where there's a bullpen. It's very open, very collaborative. I think decisions are made very quickly. I think they were in that environment, and I think they are here. We’re doing pretty much the same thing. We've teamed up with capital partners, with Rockpoint Group out of Boston, Mass Mutual, Brookdale Group, who we've done business with before. So it's just a different jersey.

DC MUD: So on to Gateway, what attracted you to that site?

Wade: We've done a lot of assemblage. We've purchased a lot of land in DC starting in the CBD, a lot in the East End, in the Mount Vernon Triangle. We've always been very fortunate controlling land in DC. Especially if you have a long time horizon. So look at just the height limits in DC, it pushes development east. That's the next market there, in Southeast. We've missed Southeast. We don't have any down there.

DC MUD: So most developments in NoMa are office space, for the most part. Why did you add a residential component?

Wade: The primary reason is we looked at how we could get the most product going at the same time, to create a sense of place, bring retail, and get it out of the ground. So we're going to build the office building, hotel, and the residential building, which is 80 percent of the overall development, in phase one. It allowed us to move into more phasing than a small office building. You can't build a million feet, all office, on day one. But we can with multiple property types. It also brings a sense of place and creates the environment.

DC MUD: So the phasing is important to the 'sense of place?'

Wade: If you have a million square feet of office, you'd build phase one for the office, and then you'd wait for the lease on the office. Whereas we're essentially going to build phase one and phase two at the same time. The ground is worth more as office, but marginally more, and waiting the extra couple of years is worth it to get it going. And also, going back to the sense of place, and having a hotel on site and mix of uses, it's pretty important. We have about 10,000 s.f. of retail here. The problem with NoMa right now, is it's not finished and doesn't have the retail.

DC MUD: So how do you make decisions on what's worth developing?

Wade: I think we're pretty focused, we're pretty good at buying land and understanding where the value is. We're pretty good at entitlements. We've been in every jurisdiction so we know what we're getting done, and we have a pretty good sense of the market. It's experience with the markets, and knowing what we can and cannot get done within the jurisdictions. We also focus pretty heavily around transportation solutions. For example, in Loudon, we bought a site that has just come to fruition. In our Tyson's project deal, we actually donated land to the HOT lanes Consortium. So they're going to put HOT (Hight Occupancy Toll) lanes literally right into our project.

DC MUD: What do you look most for in architecture?

Wade: We spend a little bit more in the buildings than some of our competitors. We try to build the top end of the market. If you look at our Tysons building, it's going to be the best building in northern Virginia. It's going to be over the top, trophy quality, the best that Virginia has seen. And I think you'll see that in Washington Gateway. You'll see a high quality design. So we just need to make sure if we deliver in the wrong market, that we have a great product.

DC MUD: Can you talk a little bit about some of your upcoming projects, like the Tyson’s project (7940 Jones Branch Drive)?

Wade: It's going to be the best building in northern Virginia. It has a curtain wall design. We'll bring in a top quality chef which we should be able to announce in the next few months. We are going to have more amenities than anybody in the Tysons market, with fitness, concierge, conference facilities, cafes, full service restaurant, the whole nine yards - floor to ceiling glass. Because of its location and design, its presence should be pretty significant.

DC MUD: What about the Courthouse site (pictured below)?

Wade: Yeah 1310 North Courthouse, it's on Courthouse Road, good visibility from Route 50. We just bought it. We're completely renovating it, gutting the entire thing. We’ll have new lobbies, new bathrooms, new elevator cabs, new plaza. We completely changed (the first floor layout) to bring in a fitness operator. We're just going to completely change the inside of the building.

DC MUD: And Potomac Yard?

Wade: We're in the entitlement process now, working with Alexandria. We have 1.8 million s.f. total, 400 residential units, 800,000 s.f. of office, 600 hotel rooms, and about 200,000 s.f. of retail, with an emphasis on food services and entertainment amenities to really create a town center. We haven't programmed it, but we're going to have a major theme in the open space,like Reston has with the ice skating rink.

DC MUD: What do you think is the most important aspect in developing a successful project?

Wade: I think high quality, and probably the right real estate, the right area and location - and also team. One of the benefits is, back to being able to work with anybody, that we can pick the best people to work with on each individual project.

DC MUD: What affords you that luxury?

Wade: The fact that we don't have any in-house services. We're pure developers. We don't have management, we don't have leasing, we don't have sales, or finance.

DC MUD: Last one- which part of DC's development process would you like to see changed?

Wade: I just think it would be great to change the process for DC in literally any jurisdiction just to make it more efficient. It just takes a very long time to get anything approved. It's a very difficult predevelopment, entitlement process. But on the flip side, it's also the benefit, because it makes it difficult to do, so you don't have as much supply once you actually get through the process. Alexandria's probably the hardest. DC is, we've always found it to be fair. We've gotten through with what we needed to get through.


Anonymous said...

Please quote a source for the figure "17 million square feet in the district of columbia in the last four years." This seems inaccurate. By the way, most of that space is just proposed.

David on Mar 6, 2008, 10:18:00 PM said...

Mea Maxima Culpa. The last half of that sentence is incorrect, "in the past four years" slipped in there somehow. The 17 million s.f. of development is supposed to reflect the total amount of development that the MRP team has been involved in. Ryan Wade, nor anyone from the MRP team (for that matter), made that claim. It was strictly an error on my part. My apologies, and thank you for pointing this out.


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