Grosvenor, Skanska Close on Ballpark Site, Hope for Construction Next Summer

The Capitol Riverfront neighborhood got another shot in the arm today as developers announced a new project adjacent to the Nationals ballpark.  Developers Skanska USA and Grosvenor Americas closed yesterday on their purchase of the long block on 1st Street, SE, between M and N Streets, just north of the ballpark, and hope to begin construction by next summer.

The site, known as Square 701, will hold four buildings with more than 650,000 s.f. in total:

-An 11-story, 224,000 s.f. office building (built by Skanska, designed by Gensler, see rendering below),

-A 170-room hotel (by Grosvenor),

-Two residential buildings with a total of 285 units and connected by a "trellised glass bridge" (by Grosvenor, designed by Hickok Cole).

In all, the site will offer up to 55,000 s.f. of retail space.  The land had been owned by Potomac-based Willco Companies since 1948, and was cleared of buildings several years ago; in a simultaneous transaction Grosvenor purchased nearly the entire block from Willco and Skanska purchased the northernmost portion of the site from Grosvenor.  The site is adjacent to the hole Monument Realty excavated in 2007 and has left sitting ever since.  Rob Ward of Skanska says that while Grosvenor and Skanska are not technical or financial partners on the project, they will be working in tandem to unify the site.

Ward tells DCMud that while Willco had its own plans for the site, both Skanska and Grosvenor are developing new building designs, which have been wending their way through DC's zoning process throughout the summer.  Ward expects that under the most optimistic circumstances work could be underway on either the residential or office component as early as next summer; to date the developers have been in discussion with the ANC and zoning officials but "don't have enough design to pull permits yet."  Ward says the project is "basically by-right zoning" and "consistent with what the city has in mind for the site."

The new building is being designed to earn a LEED Gold platinum rating.  McCaffery Interests will be representing Grosvenor on construction elements of the project, which include the alley (Cushing Place) between this site and Monument's land.  The alley is expected to be reopened, though Ward notes that he has no news on Monument's projections for work to resume.  Below is a site plan - north is up.

Washington D.C. real estate development news

Corner of 7th and H Street to Become Less Noticeable

McCaffery and Douglas' joint development project at the corner of 7th and H Streets, NW - the heart of Chinatown - went before the Historic Preservation Review Board last week, with the Board approving the concept with a contingency - "that the one-story addition on 7th Street is pulled back sufficient to ensure that it won’t be visible from the street."

Disheartened will be those readers who felt that the building's design by Sacha Rosen of R2L: Architects - much smaller than a former one for the site - wasn't noticeable enough.

Washington D.C. real estate development news

Design Details Released for DC's Highest Rent District in Chinatown

Developing the only unused and deteriorating corner at 7th and H Streets, NW in the heart of Gallery Place - Chinatown has long been on many minds. Finally, a design by Sacha Rosen of R2L:Architects, which combines the preservation of the six historic structures on site with contemporary new additions, has materialized and is moving through the approval process. Granted unanimous ANC2C consent last Wednesday, Rosen will introduce the design to the Historic Preservation Review Board on September 22nd. Of the design, Rosen said, "This is a very contemporary, but respectful treatment of [the site's] important historic fabric." 

Owned by McCaffery Interests and Douglas Development, the property includes the corner site (801 7th St, actually two buildings combined in the early 1900s), an adjacent structure to the east (675 H St), a rear carriage house, and two buildings on 7th Street to the north of the corner (807 and 809 7th St). The joint venturers obtained the last piece of the puzzle - 675 H St - at foreclosure this past February, for $9.1 million. Rosen explained there will be a new one-story addition on top of 675 H St, and a two-story addition on top of the rear carriage house, however nothing will rise above the existing four-story corner building except for a rooftop mechanical penthouse (set back on the new construction portion). Structurally unsound portions of 807 and 809 7th Street will be demolished and replaced with new four-story additions. New facades, set back from the historic real estate along 7th and H Streets, will be primarily glass; a glass elevator will also be contained within, rising up to a rooftop deck. A four-story atrium will enclose an existing exterior courtyard between 675 H St and the rear carriage house. The entire project will contain approximately 60,000 s.f., and Rosen said that the project's main objective, in addition to honoring the history of the intersection, is to "make the overall development as flexible as possible to accommodate an exciting mix of retail and office spaces." Owners are asking for some of the most expensive retail rents in the city at the site. R2L is also currently working on designs for the Wonder Bread building in Shaw. 

Washington D.C. retail and real estate development news

Washington DC's Retail Prices Surge

The best, or busiest, intersection in Washington D.C. is at H and 7th Streets NW, in the heart of Chinatown - at least according to those who own property on either axis. With four corners available to capitalize on the heavy traffic, only one corner remains open to incoming retailers. But it'll cost 'em. The lofty asking price for the ground floor of the future mixed-use site at 675 H St NW is just one indication that retail around the city is in high demand as retailers vie for limited retail space and rents around the city rise quickly, sometimes dramatically.

The joint-venture in control of leasing the retail space, as well as developing the site, is McCaffery Interests Inc. and Douglas Development, which obtained the property at auction in February. According to Juan Cameron, Managing Director of McCaffery, "The site commands a strong asking price." That price has been relayed, by several sources, as asking $250-$300 per square foot.

Cameron, who declined to speak on the record about price points, acknowledged that the space will "be on the high side" and asserts that the companies are "looking to set a new benchmark," but won't divulge specifics while leasing is underway. However, Cameron added that "the site has generated a considerable amount of interest."

John Asadoorian, founder and head of Asadoorian Retail Solutions, confirmed having heard an asking price around $250 p.s.f. for the corner spot, which is adjacent to the Friendship Arch/Chinatown Gate, a one-block stumble away from a Caps game at the Verizon Center.

Asadoorian did not speak to the feasibility of the high asking price at 7th and H, however agreed with site developers that the intersection is the closest D.C. has to New York's Times Square. Fuddruckers, located on the intersection's opposite southwest corner, struck a deal early in the decade for about $80 p.s.f., a price that raised eyebrows then, before the substantial investment in Chinatown in 2006.

Asadoorian notes that although retail rates have been rising in the few years following the recession, the jump in price at this location is relatively the largest. Whereas Georgetown leases have generally increased by around $50 p.s.f. in the last 10 or 15 years, the jump in price at Chinatown would be double that, and in less than half the time.

The increase in price underscores the fact that D.C. is fast becoming a vibrant spot for unique retail, as well as a foodie destination and Food Network-inspired hot spot, with a proliferation of national restaurateurs and chefs - even a barrage of food trucks.

It remains to be seen whether retailers will pay $250 to $300 p.s.f. for prime real estate in the District, but it's visible that the pace of retail space being leased is picking up.

The five-to-six blocks along 14th Street, NW between the U Street Corridor and P Street is witness to a similar retail surge, and the retail space here is "practically all leased up," tells Asadoorian. Steve Gaudio, JBG Rosenfeld's leasing manager for the District Condos at 14th and S Streets, said the 18,000 s.f. of ground-floor retail at the 125-unit complex is already entirely leased up, and construction is only recently underway.

Although Gaudio won't talk shop on pricing for the retail space, JBG, which is about to start Utopia a few blocks north, and the Atlantic Plumbing site, and is already mentioning higher retail rents than the $40-$50 p.s.f. rates that have prevailed in the area recently.

To return to Chinatown, if the final price for retail at 675 H Street is anywhere near $300 p.s.f., then the site will secure the highest per square foot retail lease in the District; higher than Georgetown, which commands $100 to $120 p.s.f. for similar-sized retail space, and higher than Union Station, which is currently the highest in the city, up to $200 p.s.f. That, in turn, may get the attention of property owners around the city, who may get even bolder with the prices they expect.

Washington D.C. real estate and retail news

McCaffery and Douglas Pick Up Chinatown Corner Site

The last undeveloped corner in one of the most high-traffic areas of Washington has just been acquired by McCaffery Interests Inc. and Douglas Development, at 675 H Street N.W., encompassing the iconic corner building, long since boarded up, and the vacant lot behind it.

"This is the best intersection in metro D.C." said Juan Cameron, Managing Director of McCaffery, comparing it to Georgetown's Wisconsin Avenue and M Street hub. "It is a central location with a lot of pulse, narrow streets, tons of foot traffic, a heavy daytime population, tremendous residential presence, plus the energy of the Verizon Center. In our eyes, its the closest thing Washington has to Times Square."

Though "everyone has their ideas for how the property will take shape," said Cameron, in these early stages the venture is dubbed as a state of the art, mixed use development. "Step one is looking for a marquee tenant," said Cameron.

General partners for the venture Douglas Development and McCaffery Interests acquired the property yesterday at auction. The property had gone into foreclosure thirty days ago, after Yeni Wong of Riverdale International had been unable to secure financing for the building. This past month was the last of many times the building had fallen into foreclosure; in 2009, Wong was given a notice for this property as well as 801 7th Street for $13,491,471 plus attorney's fees. Wong bought the two properties in 2006 for $10 million dollars.

This isn't the just the first or second try at developing this corner. DRI, a Transwestern Company, had slated 675 H Street as a two-building project: one that would restore the corner space and rise nine stories over the arch, the other a Class A office building behind the main storefronts. The total project would have yielded 110,000 s.f. of office space and 50,000 s.f. of retail. McCaffrey owns Georgetown Centre, leased by Barnes & Noble, and Mazza Gallery, which it bought in 1997. Douglas owns pretty much everything else.

Update: Alex Cooper Auctioneers states that the lot was purchased for $9.1 million.