Buzz of 9/11
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Next Hot Area: "Midtown"?
Perseus Realty President Bob Cohen is on a mission: to get the McPherson Square Metro and surrounding area re-named "Midtown."Perseus bought 1110 Vermont in April of last year and Cohen sees big potential in the area if it can give itself the pizzazz of a separate identity. He worked with the downtown BID to form a "Midtown association," hired someone to run it, and has started to get banners created touting the area as a "good place to live, play, and work," he tells us. He's being joined in the branding effort by others in the area such as Monument (Columbia Center), Monty Hoffman (the Alta on 14th), and the Madison Hotel. They are hoping to get the banners hung from streetlights and in the windows of vacant storefronts.
Cohen defines the would-be Midtown as running from 13th to 16th, and from Mass to H, an area that would include the Washington Post, DC Coast and Georgia Browns, 2500 hotel rooms and 3000 apartments and condos. He believes a new identity can create more a more "interactive" area so people don't flee between 5 PM and 8 AM, but things to do in the area 24 hours a day. He sees bringing retail in as key. For his part, Perseus has been juicing up the streetscape at 1110 Vermont and has fully leased the ground floor retail in the 300,000 square foot building. The retail will include not only a Starbucks and an Americano style restaurant called Mio, but, Cohen says proudly, the first Washington presence of il Mulino, a restaurant that Zagat has named in 20 of the last 23 years, he says, the best Italian restaurant in New York City.
Perseus has redone the lobby, gutted the 1980s interior, and started the first tenant buildout. The anchor (for 75,000 feet) will be WPP, the world's largest advertising firm whose Washington office also does PR and lobbying; and the Department of Justice is taking two floors. Move in will be December 1. Perseus has four office buildings in its portfolio, one other of which is in DC: a 125,000 medical building at 25th and M.As for the subway stop re-naming, Cohen says the Metro map for the yellow line is being redone by the first quarter of next year and the association is weighing in. If you see Linda Cropp or Adrian Fenty, ask them their view.
Surge for B Class?
And speaking of "Midtown," the trio of B class buildings recently unloaded by the Marshall Coyne Trust generated a record number of visits by potential buyers, says Paul Hanafin, a principal at West, Lane & Schlager, which represented the Coyne Trust. "We had over 80 tours," says Hanafin. "Typically we have 20 or 30 and up until recently the record was 50."
Why so much interest in the buildings, located at 1156 15th Street, NW,1101 15th Street, NW, and 1620 Eye Street, NW? The package represented a rare chance to scoop up three quality downtown buildings in the soon-to-surge B class. "There is a widespread feeling that the B market is going to move and perhaps very very sharply," says Hanafin. "So it was an asset type that there is a lot of interest in these days."
A bonus: Rents in the buildings - which currently are more than 90% leased - are below market value and over the next three years a substantial percentage are due to roll over, giving the new buyer a chance to adjust them upward.
The buildings, totaling 470,000 square feet sold to Rockrose Development Corporation of New York City in early August for $193 million.
1156 15th Street