This Week's D.C. Deal Sheet: Office-To-Affordable Housing Conversion Lands $51M In Falls Church

Conifer Realty has secured $51M to convert a former Inova Health System office building to 80 units of affordable housing.

The Inova-owned office building at 2290 Telestar Court is now vacant and poised to be acquired by the Fairfax County Redevelopment and Housing Authority, FCRHA and Conifer announced in separate releases this week. 

Conifer is partnering with Joseph Brown Development for the development of the site through the joint venture Merrifield Housing LLC. Upon acquisition, FCRHA will immediately enter into a 99-year ground lease with Merrifield Housing. 

FCRHA is contributing $8M toward the site acquisition. The authority said it is the first office-to-affordable housing deal it has undertaken. 

“There are many challenges involved in an office-to-residential conversion, including design, code, financing, and ensuring affordability will be preserved for years to come,” FCRHA Chair Lenore Stanton said in its release. “Through due diligence, stress testing, and very intensive analysis on the part of our staff and Conifer, we have been able to outline a successful solution that will achieve our goals.”

The developer also received housing opportunity credits, 4% low-income housing tax credits, affordable and special needs housing subordinate loans from the Virginia Department of Housing and Community Development, and Virginia Housing tax-exempt bonds and financing.

Telestar Court is Conifer’s first project in Virginia. The developer plans to break ground this month and deliver the project at the end of 2026.

FINANCING 

The joint venture that owns Marriott’s Bethesda headquarters has landed a $252M refinancing deal. BXP, which has a 50% ownership stake in 7750 Wisconsin Ave., revealed the deal in its first-quarter earnings report released Tuesday. Bernstein Cos. is its partner. It said it obtained a 10-year, nonrecourse CMBS loan with a fixed rate of just under 5.5% that matures in 2035. The 736K SF property is fully leased to Marriott International.

MILESTONES

Ernst Equities has completed a merger with Gaithersburg-based J. Alexander Management Co. and acquired a minority stake in the firm's 823-unit portfolio in Hyattsville, Rockville and D.C., Ernst Equities Managing Partner Felipe Ernst told Bisnow. Ernst and J. Alexander are forming one management company, Blue Jay Property Management, to oversee the companies' combined properties that total more than 1,700 units. Each party is bringing around 30 employees for a combined team of 60. Berkadia's Robert Meehling and Louis Jacobe brokered the deal.

The seven properties that Ernst acquired a minority stake in are: 

• The 354-unit LaSalle Park at 5443 16th Ave. in Hyattsville
• The 116-unit Landon Court at 3601 Gallatin St. in Hyattsville
• The 91-unit Madison Park at 5902 31st St. in Hyattsville
• The 70-unit Castle Manor at 5307 38th Ave. in Hyattsville 
• The 62-unit Garfield Court at 5705 43rd Ave. in Hyattsville
• 59 units at 704 Lenmore Ave. in Rockville
• 71 units at 5051 New Hampshire Ave. NW in D.C.

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Bethesda-based Metropolis Capital Advisors and Philadelphia-based AMA Advisors have merged into one commercial mortgage brokerage firm. Metropolis-AMA Advisors will be headquartered in both of the merged firms’ home cities. It has regional offices in Fort Lauderdale, Florida, and Dallas, and it plans to open new locations in Los Angeles and New York City. It also plans to hire seven to 10 new loan originators and hopes to double its transaction volume over the next three years to $2B annually. 

LEASES

A coworking company is opening its first location in D.C. The Malin D.C. is taking 20K SF at TF Cornerstone’s 1156 15th St. NW, it announced this week. The coworking space will include 12 private offices, four meeting rooms, 20 desks and 23 phone booths. The Malin has four locations in New York, two in Nashville and one in Austin. It plans to open two more in New York City and one in Savannah, Georgia. 

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Uniqlo is coming to the former J. Crew space in Georgetown, Commercial Observer reported this week. The Japan-based fashion retailer is taking 22K SF at Jamestown’s 327K SF Georgetown Park development on M Street. It is set to open at 3262 M St. NW later this year. J. Crew is moving across the street to 3077 M St. NW, EastBanc and Acadia Realty Trust announced in March. 

SALES

The developers of The Wharf sold their stake to a Canadian pension fund, the developers announced in separate releases Monday. Hoffman & Associates and Madison Marquette, which delivered the 3.5M SF Wharf across two phases in 2017 and 2022, offloaded their interests to PSP Investments. The price was undisclosed, but Bisnow previously reported that the parties were nearing a deal that valued the development at $1.8B.

PERSONNEL

Real estate attorney Jill Parks has joined Ballard Spahr as a partner, the law firm announced this week. Parks is working out of the firm’s D.C. office. She comes from Hunton Andrews Kurth, where she served as counsel for 3.5 years, according to her LinkedIn profile. The firm announced Hunton Andrews Kurth alumnus Samantha Steketee has also joined Ballard Spahr as a senior land use planner and is assisting Parks in her practice.