Network Realty Partners is preparing to break ground next year on a hotel project on North Capitol Street in what will be the firm's first ground-up development.

The three-year-old real estate firm announced this week it expects to break ground in mid-2022 on a 106-unit "apartment-style" hotel, in partnership with USAA Real Estate. The announcement comes after the Zoning Commission last month approved the developer's application for a new 100K SF hotel building on the site of the Union Square office buildings.

The hotel is planned to be built on the center courtyard in between the two office buildings at 899 and 999 North Capitol St. NE. NRP bought the property in 2019, its first major acquisition after being founded the prior year.

The developer said it hasn't yet identified an operator for the hotel. The new hotel will also feature a full-service restaurant, Network Realty said.

“When we acquired Union Square in 2019, we saw an opportunity to transform an inactive 8-hour setting into an energetic, pedestrian friendly environment,” NRP principal Sam Hollman said in a statement. “This approval is a big win for Union Square and the greater NoMa neighborhood.”

The project will be at least the third new hotel to move forward in the area surrounding Union Station in recent years.

Trammell Crow subsidiary High Street Residential in July secured a deal with Hilton Worldwide to operate a hotel at the developer's Armature Works project, which broke ground in October 2019. Office Properties Income Trust began construction this summer on a new mixed-use project at 20 Massachusetts Ave. NW that is slated to deliver a 271-room Royal Sonesta hotel.

Union Station has long been eyed for a major expansion, and the $1.2 trillion federal infrastructure bill signed into law this week could help propel that project forward and eventually bring more visitors through what is already one of the busiest transit hubs in the D.C. region.

In addition to its new hotel, NRP also plans to begin modernization work on both Union Square office buildings. Renovations will include a private entrance for government workers at 899 North Capitol St., where a U.S. Citizenship and Immigration Services field office recently renewed its 55K SF lease for another 15 years.

The developer also plans to construct a 5K SF retail space for a potential food hall or market at 999 North Capitol St. and conduct behind-the-scenes upgrades for both office buildings.

NRP was founded in 2018 by Rod Lawrence, a former partner at The JBG Cos., and former Avision Young principal Bill Morris. Last year, JBG Smith Executive Vice President Greg Trimmer also decamped to NRP, and the company has been focused on its goal of acquiring and developing mixed-use projects in the mid-Atlantic region since.