Former Edens CEO Makes Big Bet On Old Town Alexandria Retail As Vacancy Rises
The investors who sparked the revitalization of Union Market are turning their sights back toward the D.C. region.
A Charlotte-based investment firm, led by the former CEO of Edens, has spent at least $80M since December acquiring more than 15 properties to renovate in Old Town Alexandria as its King Street retail corridor faces rising vacancies.
Former Edens CEO Terry Brown, along with former Edens Chief Financial Officer Jason Tompkins and a former Sears executive, founded Asana Partners in Charlotte in 2015. The firm raised $500M in equity with its debut fund and has invested heavily in Charlotte and in Dallas.
In December, Asana acquired a portfolio of at least eight Old Town properties for more than $40M from PMA Properties, an Alexandria-based investment firm led by Rob Kaufman. In May, it acquired the vacant 8,500 SF former home of European Country Living at 1004 King St. for $3.4M. Asana declined to comment, but a member of its development team confirmed the company's investments.
Asana plans to reposition each of the assets it acquired with hopes of drawing new restaurants and retailers to Alexandria. In April, Alexandria's Board of Architectural Review approved Asana's application to partially demolish and alter the retail property at 1100 King St., which it acquired in December for $2.2M. The investor has since signed Conte's Bike Shop, which plans to open in the building this fall.
"They’ve picked up these properties that hadn’t had a whole lot of investment in recent years," Alexandria Economic Development Partnership CEO Stephanie Landrum said. "They’re now focused on renovating, putting in tenant improvements and trying to modernize these historic buildings."
Landrum said Asana also plans to renovate the 8,500 SF former European Country Living Property, one of the corridor's largest vacancies, which has been empty since the store closed in October 2015.
Landrum sees Asana's activity as a new wave of investment that will help boost the corridor's status in the D.C. area. She compared it to a previous investment wave, when Douglas Development acquired a series of Old Town properties about 10 years ago, repositioned them and brought in new high-end tenants like Lululemon, Anthropologie and H&M. The prolific owner-developer now owns 10 Old Town properties and is optimistic about the impact Asana's investment will have in the corridor.
“I know they are astute investors,” Douglas Development principal Norman Jemal said. “They are good custodians of real estate and they will help the general merchandising of the street. I think it’s a great positive any time you get smart money investing in an area.”
One of Old Town's most active retail brokers, Rappaport Executive Director Melissa Webb, also sees the Asana investments as a promising sign for the corridor.
"It's a great thing for King Street, because they want to bring in a lot of higher-profile retail tenants and do some great modifications to buildings and offer tenant improvement allowances, which will help fill up some of the vacancy," Webb said.
The new surge of investment comes at a critical time for the historic area. King Street's retail vacancy has risen from 5% to 10% in the last two years, according to Dochter & Alexander Retail Advisors' latest market report, putting it well above the area's other main urban retail corridors.
Dochter & Alexander principal Dave Dochter attributed Old Town’s rising vacancy to the emergence of newer, buzzier markets like National Harbor and The Wharf. With retail brands nationwide opening fewer stores and becoming more selective, he said Old Town does not always make the cut.
“If you were looking to do a lot of stores in the area, Old Town would be on your list,” Dochter said. “But if you’re only looking to do two or three, maybe not … Old Town is not always in that first tier, and I think that’s hurt the market a bit.”
While Landrum has noticed the rising vacancy, she said the city is not concerned about it because of Asana's planned renovations. She also said the formation of a business improvement district, an ongoing effort she has helped lead, could help Old Town compete with the D.C. area's top-tier retail markets, many of which already have active BIDs.
"One of the reasons the business community is so focused on putting a BID in place is so we have the same tools to compete with these other markets," Landrum said.
Old Town will likely be a hot topic at Bisnow's Alexandria State of the Market event on Aug. 16.