A 1980s-era office complex next to the new Herndon Metro station has been eyed for mixed-use development for years, but now a new team has taken over the project.

Penzance, which had been planning to redevelop the two-story office property since 2015, sold it to a partnership led by San Diego-based Fairfield Residential.

Fairfield Residential paid $18.25M for the 4.3-acre site on the Dulles Toll Road, Fairfax County property records show and Fairfield confirmed to Bisnow. It has partnered with a trio of Japanese companies — Sumitomo Forestry, Tokyo Tatemono and Chuo-Nittochi Co. — to take on a new vision for the property, according to a press release from the Japanese firms late last month.

Fairfield and Penzance declined to comment on the deal.

The partnership is now planning an eight-story, 400-unit residential building, with the top five floors set to be constructed from wood, according to the release, which said the project is expected to cost 21.3B yen, or $142M. The development is also planned to include 5K SF of retail, according to a CBRE spokesperson.

CBRE Senior Vice President John Sheridan and associate Charlie Mangold represented Penzance in the sale.

Construction is expected to begin in April 2024, with leasing rolling out in phases of completion, the first slated for February 2026, according to the release. Delivery is set for January 2027.

“The project [is] expected to capture rising demand for housing in areas along the subway line where large-scale redevelopment is underway,” the release says.

The Herndon Metro station opened in November 2022 as part of the Silver Line’s second phase, extending the line from Reston through Dulles International Airport and into Loudoun County. A series of new developments has moved forward around the new stations, just as they did around the Phase 1 stations in Tysons and Reston over the last decade.

Penzance had secured approval from the Herndon Planning Commission for the transformation in 2019 for a mix of residential, office and retail. In 2022, the developer sought to revise the plans — among the changes, eliminating a residential tower and scaling back the office square footage.

Fairfield Residential is an investment, management and development company with operations across the U.S. It had developed $19B worth of total projects and had 42,400 units under management as of the end of the third quarter. Also in the D.C. area, Fairfield is planning a 244-unit apartment building in Gaithersburg, 333 Ellington, set to deliver in 2024.