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Real Estate Bisnow (DC)

Bisnow Scoop:
Two Hot Multifamily Starts

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Armed with fresh cash, two developers are breaking ground on projects in two of DC's hottest neighborhoods. And one has an address you'll no doubt recognize.

We'll get to that famous address in a bit, but first: Financier Ben Lazarus of MAC Realty Advisors tells us his firm has just scored $27.4M for Madison Investments for the acquisition and development of 1921 14th St below the U Street Corridor. (That's him bottom row left, with members of MAC Realty Advisors' team and Madison's.) The funds allow groundbreaking in June on a 56-unit apartment complex and 13k SF of retail, to deliver early '16. (U Street will still be cool by then, right? Right!)

TEEL (CorpInter2) MDCRE

The site, across the street from the nearly complete Louis at 14th apartments at 14th and U, now contains a parking lot and a few historic properties. (All parking lots are historic since finding a place to park on a busy day is always a great moment in history.) Madison will rehab the existing properties and construct a nine-story tower (to be called Elysium Fourteen). Ben and colleagues Andrew McAllister, Bruce Levin, and Caren Garfield led the financing efforts for MAC on behalf of Madison.

The MAC team also closed another financing package—at 1600 Pennsylvania Ave. But not that 1600 Penn—this one's actually in Southeast. Andrew, Bruce, and Ben recently locked up a private equity investment on behalf of Novo Development to jump start work on a 77-unit apartment complex, the last remaining development site before the Sousa Bridge in SE. Novo will get started within the next few weeks, Ben tells us.

Ballston BID (Chef) DCRE
Cardinal (Cook5) DCRE

Another Bisnow Scoop:
Logan Circle Retail Sells

The JCR Cos have just purchased a big retail and parking condo at the Metropole complex in Logan Circle, the firm tells us exclusively. Just days after purchasing a vacant former association HQ (which we told you about last week), the firm scooped up the 23k SF space on 15th Street (occupied by Vida Fitness and Bang Salon) from American Realty Advisors for $6.3M. JCR owns six other properties in Logan, and firm managing partner Joe Reger tells us it's actively on the hunt for office, noting that it's close to acquiring another office building in Maryland after the Alexandria purchase.

Electrical Alliance (Training) MDCRE
Moseley (Difference3) DCRE

And We're Off at Skyland Town Center

Yesterday, the hardhats and shovels were out at the groundbreaking for Skyland Town Center in Ward 7, as the project 25 years in the making finally kicked off. (Some, like Mayor Gray, went rogue and ditched the hardhat.) Skyland's big development team (Rappaport, WC Smith, Skyland DC, Marshall Heights Community Development Organization and The East Washington) will deliver 340k SF of retail, 480 residential units, and a Walmart by 2017.

Starbucks Sale Sets Record

Harbor Group's $16.2M purchase of the Dupont Circle Starbucks (brokered by Calkain's Rick Fernandez, with sons Alex and Jack at a Nats game) set a per SF record in the area for a net-leased property, Calkain says, checking in at $1,672/SF. Rick, who repped seller Lakritz Adler with colleague David Sobelman, tells us the big number "signals the value that investors and real estate professionals from outside our region hold for Washington, DC real estate." (And caffeine.)

Bisnow (YogiBerra) intext
BMS (Sustainable2) DC

Yesterday's Residential Summit

Folks buying homes in our region are taking cues on what and where to purchase from how they select an ice cream flavor, according to Toll Brothers City Living's Stephen Alfandre (left) at our Residential State of the Market event yesterday at the Mayflower. Stephen (with Bozzuto's Tom Baum) says "it's almost like a chocolate and vanilla approach" with how DC-area buyers go about their search, since some still prefer the suburban lifestyle while many others opt to head downtown. Tom says environmental regulations are pushing development into urban infill areas, which in turn has created a hotly contested market for developers.

Lerner (1775Tysons) RDCRE

Pulte Homes division prez Lewis Burnbaum (with Lyons & Sucher's Mark Sucher) believes in more of a "swirl" approach, saying that neighborhoods should cater to multiple buyer segments. But while there's still strong demand for the big single-family home in the suburbs, living out there can be prohibitive for residents, since it can be too far away from employment centers, transportation hubs, and amenities.

Homebuilders are pouring as much as 20% to 30% of national capital allocations to the DC area, says Fraser Forbes CEO Rich Samit (with EYA's Aakash Thakkar). And building in urban areas has paid off for those lucky enough to secure development sites, as Rich says prices have eclipsed the peak of 2005-2006. Aakash says EYA's been able to lock down a few of those sites by taking on projects with difficult entitlement processes that other developers may shy away from.

The lack of huge available tracts—as well as smarter buyer habits—has steadied the market, according to Elm Street's David Flanagan, with McWilliams Ballard's Chris Ballard. And unless external factors hurt the DC economy, "we're in for several years of a reasonable place to do business," David says. Chris adds that financial apps and tools make buyers more sophisticated than ever.

Grunley (Cube)
Tranzon Fox (March26)
Bisnow (Hiring-People)

Publisher's Notebook

Last night, we snapped Bill Gates at a small evening interview and reception hosted by Atlantic Magazine at the Watergate. (The man is really, really smart. But Atlantic may be even more so, that they figured out how to get him.) Among other things, Bill said he doesn't really consider himself an entrepreneur as much as a software engineer who was so passionate about computers he decided to create a company. He even talked about commercial real estate, saying such purchases by foreigners don't concern him, as long as they allow us to purchase their assets and provided it doesn't worsen the trade balance. And yes, by Forbes' latest calculations a few days ago, Bill is once again the world's richest person—at $76B.

New Bisnow Education Video!

By popular demand, we've just released a second video we did with Peter Linneman, widely considered the top professor of commercial real estate in the US. This new video is called "Real Estate Finance," i.e., on how you get money to do deals. Although an advanced topic, it's purposely very simple to understand. It's 77 minutes, broken into 5-minute increments, so you can watch or listen as you are waiting in line, or at the gym, or lying in bed. (To each his own.) Click here for the new video and here for the old video.

Anybody running the Rock and Roll this weekend? Email chris.baird@bisnow.com.

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