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100 K Street, NE Washington, D.c.
| Opportunity Following the acquisition of 111 K Street, J Street approached the owner across the street about their interest in potentially selling their site located at 100 K Street, NE. These discussions led to the successful acquisition of 100 K Street in July 2007 in a joint venture with entities affiliated with Goldman Sachs. The site is approximately 20,000 sf located on the Northeast corner of First and K Streets, NE and was initially improved by a school bus repair facility that was under lease to Laidlaw Transit through August 2008. Plans call for the building to be razed in late 2008. |
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| Value Creation The Venture obtained transferable development rights (“TDRs”) to increase the site density to permit maximum development potential. In addition, there is a small Washington Area Metropolitan Transit Authority (“WMATA”) substation located on approximately 980 sf of land adjacent to the southeast corner of the site. J Street has engaged WMATA in discussions and is negotiating the purchase of this site in return for a perpetual easement to use a small section of the second floor for a substation function that will provide access via the adjacent railroad tracks. This will allow additional density and also enhance the overall building design. We have engaged CORE, a well known Washington architectural firm, to design an approximately 200,000 sf office condominium project which will afford one 20,000 square foot unit or two 10,000 square foot units per floor. The project’s juxtaposition to the historic Burnham Wall as well as the District owned property in the front of the site have necessitated complex and detailed discussions with the Office of Planning leading to the design of a unique landscape arrangement in the front yard of the site. |
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| Exit Strategy The design phase is wrapping up and the proposed development now includes a fitness center and retail space on the first floor. Initial marketing efforts are underway and have resulted in discussions with potential large purchasers. The targeted audience remains trade associations and non profit organizations. Given the shifting market dynamics in light of the national credit situation, the project design is being value engineered to reduce costs and to enhance the market competitiveness of this unique site. The bid package has been issued and a contractor identified. The project is anticipated to deliver in mid 2010. Currently the IRR to the venture is projected to be in the low 20s. |
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