JBG Smith Sells Development Site Near Nationals Park Approved For Over 600 Units
JBG Smith has sold a large development site near Nationals Park after getting approval for a mixed-use project but being unable to secure financing to build it.
The Bethesda-based REIT sold a 76K SF parcel on South Capitol Street SW to WC Smith last week, deed records show and the companies confirmed.
The site sold for $29.5M, and EagleBank provided a $12.8M acquisition loan, according to D.C. Recorder of Deeds documents.
WC Smith will take over the development of plans that JBG Smith proposed in June 2020 and the zoning commission approved in 2021 allowing for more than 600 units across two phases.
“We were presented with the opportunity to acquire a 75,655 square foot site, across two lots, along South Capitol Street,” WC Smith CEO and Chairman Chris Smith said in a statement sent to Bisnow. “Gensler has created a terrific design for the location, with 651 planned residential units and retail. We’re looking forward to pursuing this project.”
WC Smith hasn't yet secured development financing, a spokesperson for the firm told Bisnow.
“The current market environment for construction financing is very tight, but we’re optimistic that this will improve in the next year,” the spokesperson said.
In a two-year zoning extension request filed by WC Smith last month, the developer said JBG Smith was unable to secure financing “because of changes in economic and market conditions beyond the Owner’s reasonable control,” so it put the project on the market in the second quarter.
The property, sitting two blocks west of the Navy Yard Metro station, was formerly home to a 7-Eleven that has since been demolished.
The development is planned to deliver three buildings across two phases. The south portion of the site along M Street SW and South Capitol Street is set to be developed first, followed by the northern portion, along Half and L streets SW.
Phase A is planned to include a residential South Tower with ground-floor retail and a residential pavilion, which will also serve as the connection between the two phases, according to the zoning commission’s final order. North Tower is planned to consist of a residential tower with two- and three-story walk-up units on the ground floor.
The extension request asks that the zoning commission move the building permit deadline for Phase A to November 2025 and the construction start deadline to November 2026. A public hearing is scheduled for Oct. 26.
JBG Smith and WC Smith have substantial portfolios in the Navy Yard neighborhood, across the street from the proposed development.
WC Smith developed and owns a trio of mixed-use multifamily buildings totaling 1,140 units on the east side of Navy Yard called The Collective. It also has plans for an apartment building at 850 New Jersey Ave. SE and another 13-story tower on South Capitol Street, across from this latest development. The company is also headquartered at 1100 New Jersey Ave. SE.
JBG Smith has developed multiple mixed-use buildings in the area immediately surrounding the ballpark, including 1221 Van, West Half at 1201 Half St. SE and F1rst Residences at 1263 First St. SE. The publicly traded REIT has focused much of its attention in recent years on the National Landing area around Amazon HQ2, a project on which it is the development partner.
CORRECTION., OCT. 12, 3:20 P.M. ET: A previous version of this story incorrectly stated the sale price of the site. This story has been updated.