Fundrise Acquires Alexandria Site Approved For 3M SF Development
A property on Alexandria's Eisenhower Avenue corridor with 3M SF of development potential has traded hands.
Miller said the acquisition is the largest-ever in the D.C. region for Fundrise, a real estate crowdfunding company he co-founded in 2011. The online platform allows private investors to pool money into a series of funds that invest in residential and commercial properties. As of January, Fundrise had more than 100,000 investors on its platform and had more than $1B of equity under management.
The property sits near the Eisenhower Avenue Metro station and the U.S. Patent and Trademark Office headquarters. The 14-acre property is currently occupied by 253K SF of office, industrial and retail space that is 90% leased.
The leases expire over the next several years, Miller said, and he then plans to move forward with mixed-use development in phases. After acquiring the property in 2016, Perseus brought it through entitlements that allow more than 3M SF of office, residential and retail development.
“We bought it because we felt like it was a safe place to put your money in this environment,” Miller said. “It has a lot of stability associated with it, but it also has long-term development potential.”
The area around the Eisenhower Avenue Metro station has a large pipeline of development moving forward, including Stonebridge's $400M, Wegmans-anchored Carlyle Crossing project. WMATA is planning to build a new, 300K SF office building in the area to serve as a hub for the transit system's Northern Virginia operations.
In addition to the thousands of PTO employees working in the area, Miller said he expects to see future residential demand from Amazon employees, with the HQ2 campus just five Metro stops away on the Yellow Line.
“Considering this corridor is next to Metro and near Amazon HQ2, we think that when we go to redevelop it, which is still five to eight years before it would make sense, the location should be ripe for reconception," Miller said.
Transwestern's Mid-Atlantic Capital Markets team of Gerry Trainor, Mark Glagola, Jim Cardellicchio, Thomas Hilley, Kyle Coven and Maryann Skubal brokered the sale. Trainor said the property received strong interest because it offered immediate revenue and major development potential.
"It's a great piece of land that is a long-term covered land play with good, in-place income," Trainor said. "All of the office tenants are there because of PTO across the street, and you've also got Metro a block away. It's got a lot of great dynamics going on."
Chatham Financial's Brian Gould worked with the buyer to arrange an acquisition loan from Citizens Bank. Gould said the recent drop in interest rates allowed him to achieve the best terms for a five-year loan that he has seen in his 20-year career.
"We saw a high level of interest among the lending community for the acquisition loan," Gould said. "It speaks to the property’s strong cash flow, the submarket fundamentals and the lending community’s high level of interest to work with the Fundrise team.”
UPDATE, MARCH 12, 2:15 P.M. ET: This story has been updated with additional information about Fundrise.