Peterson Cos., a 60-year-old development firm known for building large projects in the suburbs of Washington, D.C., has made its inaugural multifamily acquisition in the District of Columbia.
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The company paid $155M to acquire The Batley, a 432-unit mixed-use building at 1270 Fourth St. NE from JBG Smith, deed records show. The property near Union Market has 29K SF of ground-floor retail anchored by the La Cosecha food hall.
JBG Smith had sought $180M for the property, according to a notice it sent to tenants in the building this year, which Bisnow reported in March. The sale, first reported by the Washington Business Journal, is $25M below that number and well below the $205M the REIT paid for it in 2021.
Peterson Cos., which has a massive portfolio of commercial properties in Maryland and Virginia, didn't own anything in D.C. before this acquisition. In 2013, it developed a condo-over-retail building in Adams Morgan that it later sold, and it once owned land on New York Avenue that it long ago sold, according to a spokesperson.
“The Batley is a high-quality asset in one of D.C.’s most dynamic neighborhoods, and we’re excited to add it to our growing residential portfolio,” Peterson Senior Managing Director of Residential Stuart Prince said in a statement. “As our first multifamily acquisition in Washington, D.C., this property aligns with our focus on strategically expanding our residential portfolio in key locations across the region.”
Last summer, Peterson hired Daniel McCahan from Madison Marquette to serve as the firm's president, working alongside CEO Jon Peterson. Founder Milt Peterson, known for building suburban megaprojects such as National Harbor, Downtown Silver Spring and Fair Lakes, died in 2021.
Jon Peterson told the WBJ last month that the company is bullish on the D.C. region despite headwinds from federal government cuts, and it plans to be more active in acquiring properties than it has been. The company has plenty of cash after recently selling a trio of properties in Chantilly, Stafford and McLean for more than $1B combined, the WBJ reported.
For JBG Smith, The Batley deal continues a trend of selling D.C. apartments. Over the last 10 months, it has sold a 283-unit West End building for $186M, a 322-unit Bethesda building for $194M — also to Peterson — and a 345-unit Fort Totten building for $87M.
JBG Smith CEO Matt Kelly told investors in April it views selling apartments as a better way to obtain liquidity than selling office assets, given that multifamily properties “remain attractively priced in the private market.”
