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Children's Defense Fund Sells Longtime HQ Near Union Station To Developer For Hotel Conversion

The longtime home of the Children's Defense Fund, a brick building near Union Station, could soon be turned into a hotel. 

The building at 25 E St. NW

Jetset Hospitality LLC bought the property at 25 E St. NW from the CDF for $24M in a deal that closed in late June, property records show. Summit Commercial Real Estate principal Gordon Nielsen, who represented Jetset in the deal, said the new owner plans to convert the property to a hotel.

The sale included a 12-month lease-back to the CDF, Nielsen said, and the organization plans to move to a new D.C. office next year. CDF Chief of Staff Max Lesko said the nonprofit has not yet selected a new location. 

"We're continuing our mission at another location, it's just a change of real estate," Lesko said. "At some point in 2019, we'll be at a new location continuing our work." 

The nonprofit organization, founded in 1973, has owned the building for at least 24 years, according to property records. The CDF also has offices in New York City; Columbus; Cleveland; Jackson, Mississippi; Los Angeles and Oakland, California; St. Paul, Minnesota; and Austin, Houston and McAllen, Texas. The CDF is working with Newmark Knight Frank, which represented it in the 25 E St. NW sale, on its search for a new home. 

The building sits in the middle of the E Street NW block between North Capitol Street and New Jersey Avenue, less than a quarter-mile from Union Station and about a half-mile from the U.S. Capitol. It includes eight above-grade floors totaling 41,500 SF and two below-ground levels totaling 11,500 SF. NKF Executive Managing Director Jud Ryan said several potential buyers were looking at the property and the top bidders aimed to convert it to a hotel, with each of them envisioning over 100 rooms in the building. 

"If you look at the building, it's very similar to the building just next to it, the George Hotel, so it lays out very well for a hotel," Ryan said. "Union Station is the largest transportation hub [in D.C.], so a lot of demand comes from that, and you have Capitol Hill right there and politicians and people lobbying on the Hill coming in and out of town." 

The Kimpton George Hotel, an adjacent, 139-room boutique hotel, opened in 1998. Around the corner on the same block is the Phoenix Park Hotel, and one block south are the Hyatt Regency and The Liaison hotels. 

A room in The Windsor Inn, a hotel Jetset Hospitality LLC owns at 1842 16th St. NW

Jetset Hospitality LLC also owns the Windsor Inn Hotel at 1842 16th St. NW and The Embassy Inn, a 38-room hotel at 1627 16th St. NW.

Those two properties, which it acquired in the same 2009 deal, are both described on hotel booking websites as budget-friendly options and have rooms available around $80 per night. Jetset, which did not respond to requests for comment, has not said if it will use a low-cost concept for its conversion of 25 E St. NW, but that could help it differentiate itself from the nearby hotels, which each list rooms between $130 and $150. 

Nielsen said the company is planning a boutique hotel at 25 E St. NW, but likely at a higher price point than its 16th Street hotels. 

"What they're going to do here is a little better-located than that and going to be a little more of a true hotel vibe," Nielsen said. "The room rate is probably going to be middle of the road."