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June 26, 2014
DC's Newest Brokerage
CBRE. JLL. Cassidy. And PM Realty Group? The Houston-based powerhouse and local property management mainstay is launching its very first brokerage arm in DC with two new hires.
Yesterday, we snapped PMRG DC managing director Dave Parker with new hires Andy Gilpin (formerly of CBRE), Eddie Trujillo (J Street), and marketing mavens Alison Reich and Kim Lim. Andy and Eddie will lead the office leasing practice. The duo hopes to leverage PMRG's national reach (it's got a major leasing and management presence in Houston, Dallas, and Atlanta, among others), while also winning new business the old-fashioned way: relationship-building and cold-calling. (We always thought that meant getting clients drunk on old-fashioneds.) PMRG, which manages 41M SF in Houston alone, as well as 1.5M SF locally, had sought to add brokerage services in DC a few years ago, Dave says, but the recession put those plans on hold.
Here's 1200 New Hampshire Ave, the firm's DC HQ and a building it's managed for years. (It also manages 810 7th St, the House of Sweden, and 2300 M St, among others locally.) Eddie, a 30-year veteran of the DC brokerage biz, says there's an opportunity to take on bigger brokerage firms since some of them have more clients than they can handle and can't offer the kind of direct service a smaller firm can. He and Andy will perform both tenant and landlord work, and say they have a specialty in representing small- to medium-size law firms and associations.
What to Expect at South Cathedral Mansions
Smaller, efficient apartments is a trend many DC developers are employing. But CAS Riegler (the firm's Kevin Riegler, right) and Commonwealth Residential are going for a different feel at the firms' newly purchased South Cathedral Mansions on Connecticut Avenue in Woodley Park. (Macrounits?) The partnership's redevelopment of the 131-unit property to a 162- to 170-unit complex "is not the 14th Street/Dupont Circle mantra of 400 shoebox units," Kevin says; the firm will look to build rooms with an average size of about 800 SF. The renovations, which Kevin says will cost about $18M, won't add any additional square footage to the over 90-year-old property; replacing all windows and adding more green space are also on the to-do list.
South Cathedral Mansions has 7,000 SF of underutilized space the partners hope to take advantage of, Kevin says, including adding a resident lounge and library. A carriage house on the property will also be renovated, he says. Commonwealth's Brad Gilchrist tells us the renovations should fit right in with Woodley Park's historically robust apartment fundamentals, where vacancy is always low and rents are typically very high. "Connecticut Avenue's desirability is never going to vanish," he adds. The partnership paid $40M to the seller, the Calomiris family, which was repped by HFF.
Drones in DC?
We got a big response from our drone survey last week, including from right here in DC. Transwestern government leasing guru Pete Marcin (in Nashville recently) has two drones (one's a backup) that enable him to get views of buildings and properties that were unachievable only a year or two ago. Clients can even have a live tour by putting on first-person view goggles and literally feel what it's like to fly around a property (they should make that a ride at Disney) and it's useful to check out upper floor or roof conditions (better than a cherry picker), he says.
Check out this incredible aerial shot from one of his drones. While the FAA has taken the position that the usage of drones for commercial purposes is restricted, a recent court decision by the NTSB calls these restrictions into question, he says (oh yeah, Pete's also an attorney). The future of drone use in commercial real estate, Marcin says, lies in whether the FAA can develop (and Congress can pass) more concrete rules for commercial drone use. Until then, the area will remain gray. If all goes well, Pete expects them to be widespread in a couple years (you can already pilot via iPad app), but would remind operators you'll probably crash your first before you become a savvy pilot. (His first is at the bottom of the Patapsco River.)
Republic Scores Construction Loan
No tenants? No problem. That appears to be the opinion of SunTrust, M&T Bank, and Artemis Real Estate Partners, which just combined to give Republic Properties a $65M construction loan for 660 N Capitol Street in NoMa. The financing allows Republic to break ground (on spec) next week on the 200k SF building, which is the second of two in its Republic Square complex in NoMa. CBRE's David Webb and Jamie Butler arranged the financing. (We've always found tenants to be the one thing distracting us from having a clear view into a building.)
This morning in Century City (adjacent to Beverly Hills), 300 joined us for for our annual Bisnow conference on the submarket, which is hot. Amazing for a community that started because Fox lost so much money on Cleopatra it had to sell off its backlot.
We held the event in space under renovation in the former MGM world headquarters, now known as Constellation Place. Above, staff readies for registration in what used to be the entrance to the CEO's suite, with the studio's Academy Awards displayed in those now-empty alcoves.
Look how upscale we've become: lox and cheese sandwiches, on a weekday!
Our panel, being all-American, donned USA jackets to try to influence the World Cup game going on at the same time of our event.
DICE Starts Today!
This morning, data center experts from across the country are flocking to the Renaissance Arlington Capitol View in Crystal City for our two-day, national data center conference, "DICE."
While speed networking, we met Fireline Corp's Dave Taylor, down from Baltimore. Dave's 70-year-old firm specializes in fire protection across all asset classes but is looking to beef up its data center bonafides, he says. Fun fact: the firm was started by eccentric director John Waters' father. Dave says the junior Mr. Waters worked at the firm as a youngster for about three hours before realizing it wasn't his calling. Stay tuned tomorrow for full coverage of the event.
As you're reading this, Clint Dempsey and the US squad are battling ze Germans for a spot in the knockout stage in the World Cup. Are you watching the game somewhere with other real estate pros? We'd love to see. Send pictures to Chris Baird and we'll publish some tomorrow, win or lose. (Although we all believe that we will win.)