K Street Office Sells After Scrapped Conversion Plans: The D.C. Deal Sheet
Bernstein Management Corp. and its partners have offloaded a downtown office building after failing to move forward on conversion plans.
The Bethesda-based company sold 1735 K St. NW for $12.5M, D.C. deed records show. The buyer is a limited liability company tied to Hung Dinh Tran and Katie Diem Dang, members of the Bethesda-based Tran Group.
BMC CEO Ed Chaglassian confirmed the sale via email to Bisnow. The Tran Group didn’t respond to a request for comment.
BMC acquired the 1960s-era property along with Urban Atlantic and Placemakr in late 2022, with plans to transform it into 106 apartments and short-term-stay residences.
But it was never able to make the project pencil.
“While we explored numerous approaches and engaged with District stakeholders on policies and incentives to support redevelopment in that corridor, current market conditions made it difficult to move forward with large-scale financing,” Chaglassian said.
“Ultimately, we felt it was the right decision to sell rather than continue holding the asset while waiting for the environment to improve,” he added. “We believe the Tran Group is well-positioned to take this project to the finish line and wish them every success.”
Newmark’s Jud Ryan, James Cassidy and Grant Marley represented BMC.
Ryan told Bisnow that the expectation is for the Tran Group to undertake an office-to-residential conversion, which could be similar to the prior partners’ plans.
Tran and Dang took out an $8.1M loan from Rockville-based Capital Bank for the purchase, deed records show.
The 97K SF midblock office building at 1735 K has traded three times in the past 4.5 years. BMC purchased it from Beacon Capital Partners for $15.5M in November 2022, just 11 months after Beacon acquired it for $16.5M from its tenant, the Financial Industry Regulatory Authority. FINRA moved out in December 2023.
FINANCING
JBG Smith has secured financing to begin construction on its transformation of the office building at 2200 Crystal Drive in Arlington into 195 apartment units. The REIT announced Declaration Partners has come on as a joint venture equity partner, and BNY is providing construction financing. JBG didn’t reveal the financing cost or the cost of construction.
SALES
Federal Realty has offloaded Barcroft Plaza in Falls Church to Bain Capital and 11North. The 113K SF property is one of five that the partnership acquired across California, Texas, Virginia and Florida for a total of $300M, the partners announced this week. Fairfax County property records show that the price for 6345 Columbia Pike was $58M. Barcroft Plaza is anchored by a 45,500 SF Harris Teeter. Other tenants include Orangetheory Fitness, Starbucks, Honeygrow and Bank of America.
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CCLC has sold a Chevy Chase medical office building that it developed in 1971, the company announced. CCLC offloaded the 191K SF 8401 Connecticut Ave. in Chevy Chase, Maryland, for $40.1M to an undisclosed buyer. The sale hasn’t been recorded in Maryland property records. Transwestern’s Gerry Trainor and Jim Cardellicchio represented CCLC.
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The federal government offloaded a vacant World War I-era office building overlooking the Tidal Basin for $17M, Bisnow first reported. Satvik Raj, who is associated with a single-family home in Vienna, Virginia, purchased the 174K SF Liberty Loan building at 401 14th St. SW and a piece of the National Mall, D.C. deed records show. The buyer received a $17.5M loan from U.K.-based OakNorth Bank, $14.9M of which was used to purchase the building. The General Services Administration announced the sale Friday and said it is expected to save taxpayers $14.6M in delinquent maintenance and $1.6M in annual operating costs.
MILESTONES
BXP has filed a voluntary design review with the D.C. Zoning Commission for its planned new trophy office building at 2100 M St. NW. The filings describe a 10-story, 334K SF office building with 8,740 SF of ground-floor retail, “multiple building entrances and several multi-level terraces.” Pickard Chilton is the architect on the design submissions. BXP said it plans to start construction in 2028 and deliver by 2031. The REIT purchased the site at the end of the year and inked a prelease with Sidley Austin for the law firm to occupy 75% of the building.
