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Real Estate Bisnow
December 11, 2012  
WorkSpaces (Left1) DCRE

Bisnow Exclusive:

Investor Snags 2 Hotels

Join Bisnow at our 3rd Annual Retail Real Estate Summit. Extended networking and an all-star panel discussing what retail tenants are looking for. Thu, Dec. 13 at the Ritz Carlton, DC. Sign up today!

Bisnow has learned that a Foxhall Partners affiliate has acquired two boutique hotels in Northwest DC for $91M, or $284K a key. We're told that after the deal closed, Orbitz offered them a great deal on a rental car.
Ben Friedman, Matt Wexler, Neil Stablow, and Susan Goldstein at Hudson, February 2012

The hotels are the 170-room Carlyle Suites at 1731 New Hampshire Ave in Dupont Circle and Glover Park's 150-key Savoy Suites at 2505 Wisconsin Ave. Foxhall’s Matt Wexler (with colleague Brian Friedman and Donohoe's Neil Stablow and Susan Goldstein at Hudson earlier this year) tells us the hotels are well rated and the company plans to build on their successful operations. The seller is local hotelier Great Addresses.

Reznick (CohnDebut) MDCRE
Carlyle Suites at 1731 New Hampshire Ave in Dupont Circle on Dec. 11, 2012
The Carlyle (which we snapped this morning) and Savoy cap a busy year for DC hotel transactions, including LaSalle Hotel Properties’ $144M purchase of the Hotel Palomar in Dupont in March, Host Hotels’ $400M buy of the Grand Hyatt in July, and Loews' acquisition of the Madison hotel, scheduled to close next month.
LF Jennings (Oct) MDCRE

Prudential Sells in Sterling
Bret Thompson, Jim Meisel, Alan Davis, Jess Dickinson, Jessica Lytle, Dek Potts, and Matt Nicholson

We're not yet ready to call it the Tysons of Loudoun, but Sterling refuses to sit idly by while its unincorporated neighbor gets all the attention. Select Income REIT bought Orbital Science Corp's 337k SF, three-building campus in Sterling for $85.6M from Prudential Real Estate Investors. The real players require some reading between the lines, though, according to HFF's Dek Potts (second from right, with colleagues Bret Thompson, Jim Meisel, Alan Davis, Jess Dickinson, Jessica Lytle, and Matt Nicholson). He says Pru is selling because its investment partner, Germany's TMW Real Estate Group, has decided to sell most of its US portfolio.

Orbital Science Corp campus at Warp Drive and Route 28 N in Sterling, Va.

Buyer SIR—a single-tenant, net-lease investor—is actually one of eight public REITS managed by Boston-based RMR Funds (also including CommonWeath REIT and Hospitality Properties Trust). Dek says Boston Properties delivered the buildings at Warp Drive and Route 28 N in 2000 and '01 for Orbital, and the tenant has recently renewed and has just over 10 years left on its lease. The challenge here was meeting the seller's pricing expectations, Dek says, considering most recent office sales have been core locations or value-add plays. This one is a non-Metro-served, suburban property, but the quality of the buildings and Orbital's credit helped the HFF investment sales team of Stephen Conley, Andrew Weir, Jim, Matt, and Dek seal the deal. We now return to Days of Our Lives, simply because the plot is easier to follow.

Retail 2.0
Richard Lake

Though retail fundamentals are “slowly healing,” retailers still need to find ways to differentiate themselves. Some ways they can do that? Roadside Development founding partner Richard Lake, who’s speaking at our 3rd Annual DC Retail Real Estate Summit, points out that cost-conscious consumers can purchase anything online, so owners and retailers have to create a retail experience rather than just promoting products and services.

CityMarket at O in Shaw on Dec. 10, 2012

Richard cites his firm’s CityMarket at O in Shaw, where we snapped construction yesterday, and Stonebridge at Potomac Town Center, as well as Federal Realty's Bethesda Row, as retail projects that add a social aspect. Shoppers can hang out there, so shopping becomes more than a chore. CityMarket will include a renovated 77k SF Giant, delivering in fall 2013, and 650 residential units. Sign up here for more from Richard and our other expert panelists Thursday at The Ritz-Carlton.

Yesterday with NAIOP Northern Virginia
Mark Hassinger, Tom Davis, Dave Millard, and Jim Moran at the Sheraton Premiere on Dec. 10, 2012

Yesterday, at NAIOP Northern Virginia's annual meeting at the Sheraton Premiere in Tysons, we snapped chairman-elect Mark Hassinger, former Rep. Tom Davis, NAIOP chairman Dave Millard of Avison Young, and Rep. Jim Moran. Tom and Jim say their proudest projects are the Lorton Reformatory redevelopment into residential and retail, the Woodrow Wilson Bridge to connect Alexandria and Prince George's County, and appropriations for the Metro.

Carol Welti, Maggie Parker, and Scott Plein at the Sheraton Premiere on Dec. 10, 2012

We also caught up with Washington Airports Task Force's Carol Welti, Comstock Partners' Maggie Parker, and Equinox principal Scott Plein. Carol and Maggie say Comstock's Reston Station will be one of the big stories of 2013, as the Dulles corridor is poised to become a 21st century Main Street with tons of square footage full of commerce. Five cranes are on site, Maggie says, making it the biggest infrastructure project east of the Mississippi. (Close second: Tom Sawyer whitewashing a fence.)

Mark Levy and David Fisher at the Sheraton Premiere on Dec. 10, 2012

Commercial Real Estate Services principal David Fisher (right, with JLL's Mark Levy) tells us NoVa practically has been put on hold, as defense contractors anticipate a fiscal cliff fiasco. Users like SAIC have been consolidating, but there’s also hope in deals like Intelsat's move to Tysons from the District.

NoMa Salutes You, Bruce!

J Street chairman Bruce Baschuk is stepping down after eight years as the NoMa BID’s first and only chairman. (StonebridgeCarras' Doug Firstenberg is jumping into his shoes.) Bruce remembers dropping off his son at Gonzaga in '95 and thinking he was “in the middle of nowhere.” Some even called it “No Man’s Land,” he says. He tells us that even then he sensed potential in the undeveloped lots and proximity to the Hill and Union Station.


Adding a Metro stop in ’04 (renamed NoMa-Gallaudet U in June) was huge for the submarket's growth. Without it, we may not have seen Doug's Constitution Square or the 1st Street Harris Teeter. Bruce says the neighborhood is only half done and he expects an influx of retail to complement the office and residential. NoMa BID prez Robin-Eve Jasper tells us the 2013 push will be green space, particularly the Plaza at First and L (big public gathering place) and a playground at Florida and N.

Sandy Wilkes, John Gordon, Bruce Baschuk, Doug Firstenberg, Robin-Eve Jasper, and Mike Smith at The Capital Grille in Chevy Chase on Dec. 10, 2012

Yesterday, the NoMa BID exec committee (The Wilkes Co's Sandy Wilkes, Polinger Development's John Gordon, Bruce, Doug, Robin, and Washington Center exec director Mike Smith) took Bruce to lunch at Chevy Chase's Capital Grille. Robin tells us she helped Bruce set up the BID when he was the guy asking community members, "Brother, can you lend me a few thousand dollars?" To Bruce's credit, they did, and the BID was the metro's fastest to get up and running. Then, following his collegial lead, its developer members did something unusual; they coordinated development plans rather than competing, she says.

Do yourself a favor and check out @ModernSeinfeld. Tell us your favorite. Email chris.baird@bisnow.com.
JLL (Deliver) DCRE
Reznick (CohnDebut) DCRE
WS (Barcelo) DCRE
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Reston (Vans2) DCRE
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