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May 12, 2008

REMINDER: If you're signed up for tomorrow's Breakfast & Schmooze with one of DC real estate's most entertaining figures, Anthony Lanier, we have a special treat: We've changed the venue and are holding it at Leopold's Kaf? in Cady's Alley (around 33rd and M) in Georgetown. Parking is easy. Anthony owns the place and will show us around his hot Club L2 and Cady's Alley next door. Special thanks to sponsor Archstone.  Sign up.


Get ready for a new (well, semi-new) power player on the commercial real estate scene. If you were in the industry 10 to 25 years ago, you already know Don Peebles, a meteorically successful developer who freely admits his fundraising for Marion Barry helped catapult him by age 24 to heading the DC Tax Appeals Board, then getting some lucrative city leases. But that was just his start. He went on to build an astonishing career, especially for the last 10 years in Miami and other cities. No one who sits with him for an hour, as we did outside the Willard last week, doubts the brilliance and energy he brings to his opportunities.


Ah, a glass of chardonnay at 5 PM on a beautiful evening at Caf? du Parc hits the spot. Don, his wife, and two kids live mainly in Coral Gables, but have a summer place in Bridgehampton, and last year decided to find a third home in DC. So he sat down at Realtor.com and with the help of realtors Greg Gaddy, Carol Dey, and Mike Rankin found a $6 million one in Mass Avenue Heights off Woodland Drive. It's a bit different from Petworth, where he grew up until age six, and (after time  in Detroit) Van Ness Center, where he lived during high school. But it's easy for him to get to DC at least twice a month:  via his Gulfstream-3, that he recently re-did, installing a couple sofas that combine into a kingsize bed.

Green Earth

Don's hoping to close a fund of $350M by the end of June, from investors like the NYC pension fund, which he would leverage into $1.2B of financing for "emerging developers without direct access to institutional capital." He believes in "buying land and taking risk." He says he'd be happy to spend $20M on a multi-family development, $60M on office, but is also looking for shopping centers or anything where he can bring value through rezoning and repositioning. Of great interest is building a super-luxury boutique hotel brand, and DC is top of the list for a location, perhaps in East End or Georgetown: 150-200 rooms and independent of a chain, like NYC's Plaza Athenee or Hotel du Cap on the Riveria.


"For a city that doesn't have a vote in Congress, it's a very political place and taught me the process I've used everywhere else," he tells us. He's not only distilled his experiences and lessons into a first book that came out last year, The Peebles Principles, but has a sequel due later this year: The Peebles Path to Real Estate Wealth. He gives credit for his interests to his mom, a divorced single mother, mortgage analyst at Fannie Mae, and member of the Tax Appeals Board prior to his tour, who started her own appraisal business. He also thinks he excelled at an early age because "the young make the best entrepreneurs: You haven't been conditioned to think about difficulties."      


Don says his investment fund business will be headquartered here but he remains interested in numerous other markets, not only Florida, but New York City, Baltimore, Atlanta, the Bay Area, and Las Vegas. In the latter, he's finished the approval and entitling process for a multi-phase project on 20 acres on Paradise Road, where he hopes to put four towers, two casinos and three luxury hotels (see picture above). Project costs would be $1.8B, with $3.7B market value. He says the Strip now makes just 42% of its money off gambling, the rest coming from F&B, conferences, and hotels. Don knows opportunity when he sees it.


We joined Jones Lang's Andy O'Brien, Dave Kollmorgen ,and  John Doub out in the rain Friday morning for the American College of Surgeon's groundbreaking of their 10-story 165k SF HQ in the  Capitol Hill submarket. ACS will occupy the 10th floor, so John and Andy are looking for tenants for the other nine. Boston Properties sold the land to ACS and will remain the fee developer.  JLL's Stephanie Lynch, Martin Kamm, and Brandon Flickinger arranged the construction loan. So what's the pitch to tenants? Space at 20F is not only around the corner from one of the most expensive buildings in town (51 Louisiana) yet priced far less, but also next door to Irish Times if you want to cut out of work early.


We joined 300 Friday night at Mellon Auditorium for Washington's top wine event, including Monument co-founder Jeff Neal, Holliday Fenoglio principal John Duffy, and Kane Companies' John Kane. Each course was accompanied by a Latour, Margaux, Mouton Rothschild, or Haut Brion. (Translation: stratospherically expensive.) John will chair the event next year and takes a special interest since it raises money for the American Heart Association, and his wife had a stroke three years ago (fully recovered).

As for Jeff, he came away with a new appreciation of the French language. He wanted to honor the winemaker at his table, from Chateau Climens, by bidding on a bottle of what he thought was his wine during the live auction. It turns out the hostess who introduced them had confused "Climens" with another winery, "Clement," which sounds similar in French. They realized the mistake later when they exchanged business cards. (Folks, we're talking about bids in the thousands, but at least it was for charity.)


May 13 Breakfast Schmooze with Anthony Lanier   Sign Up
May 20 Retrofitting to Green Panel and Schmooze  Sign Up
June 12 Breakfast Schmooze with Debby Ratner Salzberg  Sign Up
June 24 Bisnow State of the Market Conference  Sign Up

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