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Brookfield Looks To Sell A Trio Of Buildings At The Yards

Six years after becoming owner of The Yards, a pioneering development in D.C.'s booming Navy Yard neighborhood, Brookfield Properties is eyeing its first exits.

The real estate giant is looking to offload a trio of retail and mixed-use properties totaling almost 92K SF, home to Navy Yard institutions like Bluejacket, District Winery and Osteria Morini.

Brookfield's Boilermaker Shops mixed-use property at 300 Tingey St. SE

JLL has been tapped to seek buyers for the buildings, which it calls The Yards Mixed-Use Collection. The properties, two new waterfront buildings and one 105-year-old building that was redeveloped, are 96% leased to office and retail tenants. 

Brookfield Properties Executive Vice President Cy Kouhestani told Bisnow the company decided to sell because the properties are stabilized, performing well and it’s the company’s strategy to dispose of assets for its investors’ benefit.

“The nearly-fully-leased portfolio is surrounded by Brookfield’s other successful multifamily, retail and office properties at The Yards, and our planned future development will only add value to what will be the largest waterfront destination in the region," he said. 

JLL Capital Markets Director Daniel Naughton posted the marketing flier on LinkedIn Thursday. Naughton and JLL Managing Directors Jordan Lex and Dean Sands are listed as investment sales advisors for the properties.

The entire portfolio has one availability, per the marketing materials: the end space in the Boilermaker Shops building, where Stadium Sports Bar & Smokehouse shuttered this winter. The space is 3,829 SF.

Boilermaker has a few other vacant storefronts at the moment, but Brookfield has executed two leases in recent months: a Barry’s gym at the former Unleashed by Petco space and Taqueria Xochi in ramen spot Hatoba’s former footprint. Its other tenants include longstanding neighborhood brewery Bluejacket and Pacers Running. The property has office space on the top level.

On the waterfront, 385 Water St. SE houses a single tenant, District Winery. Next door, Lumbershed at 301 Water St. SE  is home to a variety of ground-floor restaurants, including Osteria Morini, Agua 301 and Bammy’s. Global water technology company Xylem’s headquarters is located on the second floor. 

The three properties have a weighted average lease term of 7.2 years.

Brookfield took ownership of The Yards, 48-acres of development and potential development, in 2018 when it purchased Forest City Realty Trust for $11.4B. 

The company is now developing the west side of its acreage, The Yards Phase 2, near the Nationals Park side of the neighborhood. It kicked off the development phase in 2020 with a 300K SF office building, now home to Chemonics. 

Brookfield delivered a 379-unit apartment building, Vela, last year, and neighboring 467-unit DC Urby is under construction and expected to deliver in 2025. Hundreds of thousands of square feet of public space, retail and office leading directly to the water is also planned.